TCR_Public/060824.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

            Thursday, August 24, 2006, Vol. 10, No. 201

                             Headlines

1945 ROUTE 23: Has Until Sept. 25 to File Schedules & Statement
1945 ROUTE 23: Section 341(a) Meeting Scheduled for September 20
ADVANCED VENDING: Hires Kennedy Koontz as Bankruptcy Counsel
ADVANCED VENDING: Section 341(a) Meeting Scheduled on September 12
ALERIS INTERNATIONAL: Earns $55.4 Million in Quarter Ended June 30

ALLEGHENY ENERGY: Earns $31.1 Million in 2006 Second Quarter
AMERICAN MEDIA: Inks Consent Agreements with Senior Noteholders
APRIA HEALTHCARE: Earns $18.5 Million in Quarter Ended June 30
ASHLAND INC: Share Repurchase Plan Cues S&P to Downgrade Ratings
AXS-ONE INC: June 30 Balance Sheet Upside-Down by $7.08 Million

BALL CORP: Earns $132.7 Million in 2006 Second Quarter
BENCHMARK ELECTRONICS: Earns $27.5 Mil. in Quarter Ended June 30
BERRY-HILL: Court Approves $21 Mil. American Capital DIP Financing
CALPINE CORP: CCFC Seeks Waiver Consents from Senior Noteholders
CATHOLIC CHURCH: Lawyer Suggests Parishioners Help Raise Funds

CATHOLIC CHURCH: Spokane Wants Oregon Auto Settlement Pact Okayed
CITATION CORP: Ford's Production Cuts Cue S&P's Negative Watch
COLLINS & AIKMAN: Outlines Procedures for Abandoning GE Equipment
COMPLETE RETREATS: R. Glanville Balks at Compensation Procedure
COMPLETE RETREATS: U.S. Trustee Says Professional Fees Can Wait

COMPLETE RETREATS: Case Summary & 50 Largest Unsecured Creditors
COMSTOCK RESOURCES: Buys Oil and Gas Properties for $67.2 Million
CONGOLEUM CORP: Insurers & Bondholders File Competing Ch. 11 Plan
CONGOLEUM CORP: Inks $16.95 Mil. Settlement with Century Indemnity
CONSOLIDATED CONTAINER: Unit Remains Main Supplier of Dean Dairy

COOPER-STANDARD: Ford's Production Cuts Cue S&P's Negative Watch
DANA CORP: Creditors Balk at Proposed Execs' Compensation Scheme
DANA CORP: SEIU Fund, et al. File Lawsuit Against Dana Execs
DELPHI CORP: Ad Hoc Equity Panel Members Hold 20% Stake
DELPHI CORP: Court Approves Information Sharing with Equity Panel

DIAMONDHEAD CASINO: Losses Continue in Absence of Operations
DIRECTED ELECTRONICS: Acquires Polk Audio for $136 Million
DOMTAR INC: Inks $1.35 Billion Merger Deal with Weyerhaeuser
ECOM ECOM.COM: Files Joint Plan of Reorganization in Florida
EMISPHERE TECH: Accumulated Deficit Tops $381.2 Mil. at June 30

EMMIS COMMUNICATIONS: S&P Holds B+ Rating on Negative Watch
ENER1 INC: Amends Year 2005 Financial Statements Due to Errors
ENER1 INC: Posts $32 Million Net Loss in Quarter Ended June 30
ENTERCOM COMMUNICATIONS: S&P Holds Low-B Ratings on Negative Watch
ENTERCOM RADIO: Radio Station Buys Cue Moody's to Review Ratings

FERRO CORPORATION: Sells Specialty Plastics Biz for $133 Million
FISCHER IMAGING: Case Summary & 20 Largest Unsecured Creditors
FOAMEX INTERNATIONAL: Gets OK to Assume Lyondell Chemical Contract
FONIX CORP: Balance Sheet Upside-Down by $21.09 Mil. at June 30
FORD MOTOR: Opening Alliance Talks with Renault-Nissan's CEO

GENTA INC: Posts $14.6 Mil. Net Loss in 2nd Quarter Ended June 30
GLENBOROUGH REALTY: MSRE Merger Cues Moody's to Review Ratings
GOLD KIST: Pilgrim's Pride's Offer Prompts S&P's Positive Watch
HARTCOURT COMPANIES: Amends 2003 Report to Account for Purchases
HARTCOURT COMPANIES: New Management Outlines Business Strategy

HAYES LEMMERZ: Ford's Production Cuts Cue S&P's Negative Watch
INN OF THE MOUNTAIN: Moody's Confirms B3 Senior Note Rating
INTEGRATED HEALTH: Ex-Execs Want Trustee's Payment of Legal Fees
KING PHARMA: Moody's Withdraws Ba3 Rating on 2-3/4% Debentures
KMART CORP: Roberts Estate Wants Plan Injunction Modified

KMART CORP: Seeks Summary Judgment on Eagle's $329,452 Claim
LARGE SCALE: Taps Sugarman & Company as Financial Consultant
LARGE SCALE: Wants Exclusive Period to Confirm a Plan Extended
LE GOURMET: Section 341(a) Meeting Set for September 13
LE GOURMET: Taps FTI Consulting as Financial Advisor

LIONEL LLC: Gets Open-Ended Deadline to File Chapter 11 Plan
MARK IV: Ford's Production Cuts Prompt S&P's Negative Watch
METALDYNE CORP: Ford's Production Cuts Cue S&P's Negative Watch
MIRANT CORP: 52 Million Shares Tendered in "Dutch Auction"
MUSICLAND HOLDING: Court Approves Supplemental Incentive Plan

MUSICLAND HOLDING: Will Pay $26 Mil. to Secured Trade Debt Holders
NATURADE INC: Redux Completes Controlling Interest Acquisition
NORTEL NETWORKS: Chosen as Supplier for France's Bouygues Telecom
NORTHWESTERN CORP: Moody's Reviews Ba1 Rating and May Upgrade
NOVASITE PHARMA: Agent Selling Collateral on August 31 in Boston

NVF CO: Final Cash Collateral Hearing Set for September 21
ORIGEN FINANCIAL: Fitch Affirms Two Cert. Classes' Junk Ratings
PERFORMANCE TRANSPORTATION: Elects to Assume 22 Property Leases
PERFORMANCE TRANSPORTATION: Extends Firestone Contract to 2009
PIERRE FOODS: Clovervale Purchase Won't Affect Moody's B1 Rating

PILGRIM'S PRIDE: Unsolicited Gold Bid Cues S&P's Negative Watch
PLASTECH ENGINEERED: Ford's Production Cut Cues S&P's Neg. Watch
POE FINANCIAL: Case Summary & 30 Largest Unsecured Creditors
POPULAR CLUB: Section 341(a) Meeting Schedules on September 13
POWERCOLD CORP: Balance Sheet Upside-Down by $3.89 Mil. at June 30

RENATA RESORT: First Amended Plan Proposes Liquidation of Assets
RIGEL CORP: Judge Baum Converts Case to Chapter 7 Liquidation
RIGEL CORP: Chapter 7 Trustee Hires Allen & Sala as Counsel
ROUGE INDUSTRIES: Court Approves $50-Million Ford Settlement
SAINT VINCENTS: Selling Health School to St. John's for $7.7 Mil.

SATELITES MEXICANOS: Hires UBS Securities as Financial Advisors
SATELITES MEXICANOS: Section 341 Meeting Scheduled for Sept. 27
SCOTTISH RE: Fitch Downgrades Issuer Default Rating to BB
SERACARE LIFE: Inks Letter of Intent for $25-Mil. Convertible Loan
SILICON GRAPHICS: Wants Court Nod on Revised KPMG Hourly Rates

SILICON GRAPHICS: Taps Paul Hastings as Special IP Counsel
SOLUTIA INC: Engages Dundas & Wilson as Corporate Counsel
SOLUTIA INC: Official Panel Hires Saul Ewing as Conflicts Counsel
STAR GAS: Federal Judge Dismisses Securities Class Action
STEEL DYNAMICS: S&P Puts BB Corp. Credit Rating on Positive Watch

TAPESTRY PHARMA: Incurs $4.1 Million Net Loss in Second Quarter
TENET HEALTHCARE: USC Wants Tenet to Give Up Hospital Ownership
TOWER PARK: Balance Sheet Upside-Down by $5.36 Mil. at June 30
TRANSMONTAIGNE INC: Prices $200 Mil. 9-1/8% Senior Notes Offering
TURNER-DUNN HOMES: Voluntary Chapter 11 Case Summary

US AIRWAYS: Pilot Leaders Picket in Philadelphia Int'l Airport
VALENCE TECH: Posts $5.7 Million Net Loss in Quarter Ended June 30
VARIG S.A.: Eyeing $2 Billion Loan to Fund Aircraft Purchase
VARIG S.A.: Resuming Venezuelan Service Tomorrow
VESCOR DEVELOPMENT: Case Summary & 11 Largest Unsecured Creditors

VISKASE COS: Strained Liquidity Prompts S&P to Junk Ratings
VISTEON CORP: Ford's Production Cuts Cue S&P's Negative Watch
WORLDCOM INC: District Court Bars Alan Grayson's Lift Stay Motion

* Kronish Lieb to Merge with Cooley Godward

* Chapter 11 Cases with Assets & Liabilities Below $1,000,000

                             *********

1945 ROUTE 23: Has Until Sept. 25 to File Schedules & Statement
---------------------------------------------------------------
The Hon. Novalyn L. Winfield of the U.S. Bankruptcy Court for the
District of New Jersey gave 1945 Route 23 Associates, Inc., and
its debtor-affiliate, R&S Parts and Service Inc., until Sept. 25,
2006, to file their schedules of assets and liabilities and
statements of financial affairs.

The Debtors say that to prepare the Statements and Schedules, they
must gather information from books and records for each of the two
Debtor entities.  Consequently, the Debtors contend, collection of
the necessary information requires the expenditure of substantial
time and effort on their part.

Headquartered Wayne, New Jersey, 1945 Route 23 Associates, Inc.,
owns commercial real estate.  Its affiliate, R&S Parts and Service
Inc., sells after-market automotive parts and accessories and
operates automotive service centers.  The Company and its
affiliate filed for chapter 11 protection on Aug. 10, 2006 (Bankr.
D. N.J. Case Nos. 06-17474 & 06-17475).  Kenneth A. Rosen, Esq.,
at Lowenstein Sandler PC, represents the Debtors.  When the
Debtors filed for protection from their creditors, they estimated
assets and debts between $10 million and $50 million.


1945 ROUTE 23: Section 341(a) Meeting Scheduled for September 20
----------------------------------------------------------------
The U.S. Trustee for Region 3 will convene a meeting of 1945 Route
23 Associates and its debtor-affiliate, R&S Parts and Service
Inc.'s creditors at 3:00 p.m., on Sept. 20, 2006, at the Office of
the U.S. Trustee, Raymond Boulevard, One Newark Center, Suite 1401
in Newark, New Jersey.  This is the first meeting of creditors
required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Headquartered Wayne, New Jersey, 1945 Route 23 Associates, Inc.,
owns commercial real estate.  Its affiliate, R&S Parts and Service
Inc., sells after-market automotive parts and accessories and
operates automotive service centers.  The Company and its
affiliate filed for chapter 11 protection on Aug. 10, 2006 (Bankr.
D. N.J. Case Nos. 06-17474 & 06-17475).  Kenneth A. Rosen, Esq.,
at Lowenstein Sandler PC, represents the Debtors.  When the
Debtors filed for protection from their creditors, they estimated
assets and debts between $10 million and $50 million.


ADVANCED VENDING: Hires Kennedy Koontz as Bankruptcy Counsel
------------------------------------------------------------
Advanced Vending Systems, Inc., obtained authority from the U.S.
Bankruptcy Court for the Eastern District of Tennessee to employ
Kennedy, Koontz & Farinash as its bankruptcy counsel.

Kennedy Koontz is expected to:

    a) assist the Debtor in the preparation of its schedules,
       statements of affairs and the periodic financial reports
       required by the Bankruptcy Code, the Bankruptcy Rules and
       any other order of the Court;

    b) assist the Debtor in consultation negotiation and all other
       dealings with creditors, equity, security holders and other
       parties in interest concerning the administration of its
       case;

    c) prepare pleadings, conducting investigations and making
       court appearances incidental to the administration of the
       Debtor's estate;

    d) advise the Debtor of its rights, duties and obligations
       under the Bankruptcy Code, Bankruptcy Rules, Local Rules
       and orders of the Court;

    e) assist the Debtor in the development and formulation of a
       plan of reorganization including the preparation of a plan,
       disclosure statement and any other related documents for
       submission to this court and to Debtor's creditors, equity
       holders and other parties in interest;

    f) advise and assist the Debtor with respect to litigation;

    g) render corporate and other legal advise and perform all
       those legal services necessary and proper to the
       functioning of the Debtor during the pendency of its case;
       and

    h) take any and all necessary actions in the interest of the
       Debtor and its estate incident to the proper representation
       of the Debtor and the administration of its case.

The Debtor tells the Court that the firm's professionals bill:

       Professional                      Hourly Rate
       ------------                      -----------
       Richard Kennedy, Esq.                 $340
       Richard Klingler, Esq.                $225
       Jerry Farinash, Esq.                  $210
       Shannon Scearce, Esq.                 $165
       Jeff Wolford, Esq.                    $130
       Jason Demastus, Esq.                  $125

       Paralegals                             $75

Mr. Kennedy assures the Court that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.

Headquartered in Ringgold, Georgia, Advanced Vending Systems, Inc.
-- http://www.avsvend.com/-- operates snack food vending  
machines.  The Company filed for chapter 11 protection on Aug. 7,
2006 (Bankr. E.D. Tenn. Case No. 06-12523).  Richard C Kennedy,
Esq., at Kennedy, Koontz & Farinash, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it estimated less than $50,000 in assets and
estimated debts between $10 million and $50 million.


ADVANCED VENDING: Section 341(a) Meeting Scheduled on September 12
------------------------------------------------------------------
The U.S. Trustee for Region 8 will convene a meeting of Advanced
Vending Systems Inc.'s creditors at 10:00 a.m., on Sept. 12, 2006,
at Basement Room 18, U. S. Bankruptcy Court, 31 East 11th Street
in Chattanooga, Tennessee.  This is the first meeting of creditors
required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Headquartered in Ringgold, Georgia, Advanced Vending Systems, Inc.
-- http://www.avsvend.com/-- operates snack food vending  
machines.  The Company filed for chapter 11 protection on Aug. 7,
2006 (Bankr. E.D. Tenn. Case No. 06-12523).  Richard C Kennedy,
Esq., at Kennedy, Koontz & Farinash, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it estimated less than $50,000 in assets and
estimated debts between $10 million and $50 million.


ALERIS INTERNATIONAL: Earns $55.4 Million in Quarter Ended June 30
------------------------------------------------------------------
Aleris International, Inc. reported record results for the second
quarter of 2006 and the six months ended June 30, 2006.

Operating income increased to a quarterly record of $102.6 million
for the second quarter of 2006 from last year's $30.8 million, an
increase of $71.8 million, or 233%.

Second quarter net income was a record $55.4 million, at an
estimated tax rate of 36.9%, compared with reported net income of
$18.9 million in the second quarter of 2005, based on an estimated
tax rate of 9.8%.

Aleris reported second quarter 2006 revenues of $1.01 billion.  
For the second quarter of 2005, Aleris reported revenues of
$603.6 million.

Merger-related synergies from the Commonwealth acquisition and
company wide productivity initiatives aggregated $15 million for
the quarter while synergies related to the 2005 acquisitions
totaled approximately $11 million, exceeding the Company's
expectations.

The Company is raising its estimate of merger-related synergies
from the Commonwealth acquisition and company wide productivity
initiatives to be realized within 18 to 24 months of the merger to
$65 million from $50 million.

On Aug. 1, 2006 Aleris closed the acquisition of the downstream
aluminum business of Corus Group plc for a purchase price of
approximately $887 million.  Simultaneously, the Company entered
into new credit agreements, the proceeds from which were used to
fund the acquisition and refinance substantially all of the
Company's existing indebtedness.  The Company expects to incur
charges in the third quarter of approximately $53.5 million
related to the refinancing.

Steven J. Demetriou, Chairman and Chief Executive Officer of
Aleris, said, "We are extremely pleased with the record results we
achieved for the second quarter of 2006 with operating income
increasing more than 200% from the prior-year period.  The results
not only exceeded our expectations but also reaffirmed the
strength of our businesses.  Our rolled products business
benefited from acquisitions, strengthened margins from improved
scrap spreads, the favorable FIFO impact of the rising London
Metal Exchange on a year- over-year basis and continued
productivity improvements.  Aluminum recycling increased the
momentum begun over the last several quarters, while zinc
continued to generate record earnings.  We are particularly
pleased with the impact of the acquisitions we made in 2005 which
are contributing substantially to our increased profitability."

                              Outlook

Mr. Demetriou said, "We are particularly pleased to have completed
the Corus acquisition, which should strengthen our product
portfolio, expand our global capabilities and contribute
significantly to our future profitability.  We welcome all 4,600
former Corus employees onto the Aleris team and look forward to
building a world-class global aluminum company.  In addition, we
remain focused on achieving maximum benefit from the original
Commonwealth merger and are again raising our estimated synergy
target to $65 million from $50 million to be achieved within 18 to
24 months of the original merger."

A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?103c

                             About Aleris

Headquartered in Beachwood, Ohio, a suburb of Cleveland, Aleris
International, Inc. -- http://www.aleris.com/-- manufactures  
aluminum rolled products and extrusions, aluminum recycling and
specification alloy production.  The Company is also a recycler of
zinc and a leading U.S. manufacturer of zinc metal and value-added
zinc products that include zinc oxide and zinc dust.  The Company
operates 50 production facilities in North America, Europe, South
America and Asia, and employs approximately 8,600 employees.

                         *     *     *

As reported in the Troubled Company Reporter on Aug. 11, 2006,
Standard & Poor's Ratings Services placed its 'BB-' corporate
credit and other ratings on Aleris on CreditWatch with negative
implications.

As reported in the Troubled Company Reporter on Aug. 10, 2006,
Moody's Investors Service placed Aleris' ratings under review for
possible downgrade.  The review was prompted by the Company's
announcement of a merger agreement with Texas Pacific Group.

Ratings placed under review possible downgrade include the B1
Corporate Family Rating and the Ba3 Senior Secured Bank Credit
Facility rating.



ALLEGHENY ENERGY: Earns $31.1 Million in 2006 Second Quarter
------------------------------------------------------------
Allegheny Energy, Inc., reported $31.1 million of net income on
$722.2 million of net revenues for the three months ended June 30,
2006, compared to an $18.4 million net loss on $714.6 million of
net revenues in 2005, the Company disclosed its second quarter
financial results on Form 10-Q to the Securities and Exchange
Commission.

The Company's June 30 balance sheet also showed strained liquidity
with $952.8 million in total current assets available to pay
$1.1 billion in total current liabilities coming due within the
next 12 months.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?1038

Headquartered in Greensburg, Pennsylvania, Allegheny Energy, Inc.
(NYSE:AYE) -- http://www.alleghenyenergy.com/-- is an investor-
owned utility consisting of two major businesses.  Allegheny
Energy Supply owns and operates electric generating facilities,
and Allegheny Power delivers low-cost, reliable electric service
to customers in Pennsylvania, West Virginia, Maryland and
Virginia.

                         *     *     *

As reported in the Troubled Company Reporter on June 28, 2006
Fitch upgraded the Issuer Default Rating and senior unsecured debt
ratings of Allegheny Energy, Inc., to 'BB+' from 'BB-'.  The
ratings of Allegheny Energy Supply Company, LLC, and Allegheny
Generating Company (AYE's non-regulated subsidiaries) were also
upgraded by Fitch.  The Rating Outlook for AYE, AE Supply and AGC
is Stable.


AMERICAN MEDIA: Inks Consent Agreements with Senior Noteholders
---------------------------------------------------------------
American Media Operations, Inc., disclosed that on Aug. 18, 2006,
it entered into Consent Agreements with:

   (a) certain holders of its 10-1/4% Series B Senior Subordinated
       Notes due 2009, who collectively hold approximately 57.96%
       of the outstanding principal amount of the 2009 Notes; and

   (b) certain holders of its 8-7/8% Senior Subordinated Notes due
       2011, who collectively hold approximately 65.32% of the
       outstanding principal amount of the 2011 Notes.

The holders of a majority in principal amount of each series of
Notes, pursuant to the agreements, have provided their consents to
specified amendments to the indentures, to which the Notes were
issued.  The Company will pay $1.25 per $1,000 in principal amount
of Notes to each holder of Notes.

                     Supplemental Indenture

In addition, pursuant to the requirements of the Consent
Agreements, the Company also entered into:

    (i) a Fifth Supplemental Indenture, dated as of Aug. 18, 2006,
        among the Company, the Note Guarantors named therein and
        HSBC Bank USA, National Association, as trustee, relating
        to the Indenture governing the 2009 Notes; and

   (ii) a Third Supplemental Indenture, dated as of Aug. 18, 2006,
        among the Company, the Note Guarantors named therein and
        the Trustee, relating to the Indenture governing the 2011
        Notes.

The principal purpose of each Supplemental Indenture is to permit
the Company to extend the date, by which it is required to file
with the Securities and Exchange Commission and provide the
Trustee and holders of Notes:

   (a) its quarterly report on Form 10-Q for the quarter ended
       Dec. 31, 2005 to Oct. 31, 2006,

   (b) its annual report on Form 10-K for the year ended
       March 31, 2006 to Oct. 31, 2006,

   (c) the quarterly report on Form 10-Q for the quarter ended
       June 30, 2006 to Dec. 15, 2006 and

   (d) the quarterly report on Form 10-Q for the quarter ended
       Sept. 30, 2006 to Jan. 31, 2007.

                    Credit Agreement Waiver

The Company further disclosed that it entered into an Amendment
and Waiver under its Credit Agreement, dated as of Jan. 30, 2006,
by and among the Company, American Media, Inc., Deutsche Bank
Securities Inc., as the Syndication Agent, Bear Stearns Corporate
Lending Inc., General Electric Capital Corporation and Lehman
Commercial Paper Inc., as Documentation Agents, and JPMorgan Chase
Bank, N.A., as Administrative Agent.  The Waiver provides for an
extension of the deadline for delivery of its financial statements
for periods through Sept. 30, 2006.

Headquartered in Boca Raton, Florida, American Media Operations
Inc. is the United States' largest publisher of celebrity, health
and fitness, and Spanish language magazines.

                           *     *     *

Moody's assigned American Media Operations' bank loan debt and
long-term corporate family ratings at B1 and B2 respectively, and
junked the Company's senior subordinate debt rating.

Standard & Poor's placed B- ratings on the Company's long-term
local and foreign issuer credits.

All ratings were placed in February 2006.


APRIA HEALTHCARE: Earns $18.5 Million in Quarter Ended June 30
--------------------------------------------------------------
Apria Healthcare Group Inc. earned $18.5 million of net income for
the quarter ended June 30, 2006, compared to $3 million for the
second quarter of 2005.  The 2005 period reflects the initial
recording of a $20 million accrual upon settlement of a qui tam
lawsuit.

Revenues were $376.1 million in the second quarter of 2006,
compared to $374.9 million in the second quarter of 2005.  Net
cash provided by operating activities was $90.7 million in the
second quarter of 2006, compared to $44.6 million in the same
period last year.

Revenue and net income growth for the second quarter of 2006, when
compared to the second quarter of 2005, were negatively impacted
by Medicare reimbursement reductions and related respiratory drug
product cost increases.  The impact of these Medicare effects was
$3.3 million to revenues, $1.4 million to cost of goods and
$3 million to net income.

Gross margins were 65.7% in the second quarter of 2006, compared
to 68.1% reported in the second quarter of last year.  The decline
in margins is primarily attributable to the Medicare revenue
pricing reductions and related product cost increases, managed
care pricing reductions and product mix shifts.

"We are encouraged by our solid performance in the second
quarter," said Lawrence M. Higby, Chief Executive Officer.  "Our
collection and cost control initiatives are starting to deliver
concrete savings to the P&L as evidenced by the decreases in bad
debt and SD&A percentages.  During late 2005 and early 2006, we
have intently focused our efforts on improving our billing
processes and implementing a credit card initiative that has
successfully increased the collection of patient co-pays.  In
addition, expenditures for patient service equipment reached an
all-time low level, while days sales outstanding improved quarter-
to-quarter by four days -- two more indicators that suggest our
cost control initiatives are on the right track."

"Revenues from the CIGNA contract are continuing to exceed our
initial expectations," Mr. Higby added, "while trends related to
revenue statistics such as new patient starts and growth in
patient census -- especially in the product lines of oxygen
therapy, home medical equipment, enteral nutrition and infusion
therapy -- are also positive.  In addition, our sales team signed
over 200 new revenue-generating managed care contracts in the
quarter.  However, based on our revenue growth rate, we realize
there is still much work to be done in the sales organization.
During the second half of the year, we will focus heavily on
increasing the productivity of the sales team to accelerate the
growth rate."

                         2006 Outlook

The Company has decided to defer any further share repurchases
until after the end of 2006.  Instead, the focus will be on
reducing long-term debt and otherwise strengthening the balance
sheet.

Given the slower return of organic sales growth, the Company now
estimates that sales growth in 2006 will be approximately 3%.
Management expects that the impact of the sales shortfall will be
largely offset by cost savings.  The Company does not expect
earnings per share in the third quarter to exceed second quarter
results, as the current quarter is a seasonally slow revenue
period and labor costs will be higher due to a Company-wide wage
increase which took effect in the beginning of July.

A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?103d

                      Resignation of CFO

Amin I. Khalifa, the Company's Executive Vice President and Chief
Financial Officer, will be resigning from Apria effective
Aug. 25, 2006.  "I want to thank Larry Higby and all Apria
employees for making my three years here fulfilling," said Mr.
Khalifa.  "My move comes at a time when Apria is on the rebound
with tighter operations, favorable cash flow and building sales
momentum.  I am making this change for only one reason -- a unique
opportunity to join a growth company in the telecommunications
industry."  Mr. Higby commented, "David Goldsmith and I want to
thank Amin for his many contributions to Apria's success.  He
leaves with our financial house in good order and we wish him well
in his new endeavor."

A search for Mr. Khalifa's replacement is already underway.  Upon
his departure, Alicia Price, the Company's Vice President and
Controller, will assume the duties of the Chief Financial Officer
on an interim basis.

                     About Apria Healthcare

Headquartered in Lake Forest, California, Apria Healthcare Group
Inc. -- http://www.apria.com/-- provides home respiratory  
therapy, home infusion therapy and home medical equipment through
approximately 500 branches serving patients in 50 states.  With
$1.5 billion in annual revenues, it is the nation's leading
homecare company.

                         *     *     *

As reported in the Troubled Company Reporter on June 5, 2006,
Standard & Poor's Ratings Services affirmed its BB+, Stable,
rating on Apria Healthcare.


ASHLAND INC: Share Repurchase Plan Cues S&P to Downgrade Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit and senior unsecured debt ratings on Ashland Inc. to 'BB+'
from 'BBB-', and its short-term corporate credit and commercial
paper ratings to 'B' from 'A-3'.  The outlook is stable for this
Ashland, Kentucky-based company.

The downgrade reflects the expected application of large cash
proceeds from the planned sale of Ashland Paving and Construction
Inc. for shareholder initiatives rather than business investments.
Management intends to recommend to its Board of Directors that
substantially all of the roughly $1.25 billion (after taxes) of
sale proceeds be used for share repurchases and a special dividend
to stockholders.

"While APAC is underperforming, the monetizing of those assets
without also bolstering cash for redeployment into other
businesses will make it that much more difficult for Ashland to
strengthen its overall business risk profile to investment grade,"
said Standard & Poor's credit analyst Wesley E. Chinn.

The ratings on Ashland incorporate the recent definitive agreement
to sell the stock of APAC to Oldcastle Materials Inc.  Ashland's
credit quality also reflects a below-investment-grade business
risk profile, which is penalized by weak consolidated operating
margins, and low discretionary cash flows.

These negatives are tempered by a virtually debt-free capital
structure, and cash and securities of almost $1 billion, excluding
proceeds from the APAC transaction.  With the sale of APAC,
Ashland will be left with a portfolio still generating revenues in
excess of $7 billion and consisting of the manufacturing and
distribution of chemicals; and the marketing of Valvoline brand
motor oil and car care products and services.

Ashland's hunt for acquisitions continues to focus on the
composites, adhesives, and water technologies sectors within the
specialty chemical industry.  Its reinvestment strategy could
remain patient and deliberate for the time being, since
acquisition opportunities are viewed as somewhat expensive and not
meaningful.  

Utilization of the cash position and leveraging of the capital
structure could encompass several years.  As a result, there is
the likelihood that significant additions to debt will not be
required anytime soon.  But a sizable transaction would not be a
surprise eventually, as management increases its expertise in
acquiring and integrating specialty chemical operations.


AXS-ONE INC: June 30 Balance Sheet Upside-Down by $7.08 Million
---------------------------------------------------------------
AXS-ONE Inc. reported a net loss of $2.5 million for the second
quarter ended June 30, 2006, compared to a net loss of
$4.4 million in the second quarter of last year.

Total revenues for the second quarter were $8 million, an increase
of 6.8% compared with revenues of $7.5 million for the second
quarter of 2005 and up 6.5% sequentially compared to the
$7.5 million reported for the first quarter.

For the first six months of 2006, total revenues were
$15.5 million compared with total revenues of $15.5 million for
the first six months of 2005.  The net loss for the first six
months of 2006 was $5.2 million, compared to a net loss of
$7.5 million for the comparable prior-year period.

At June 30, 2006, the Company's balance sheet showed $9,799,000 in
total assets and $16,887,000 in total liabilities, resulting in a
$7,088,000 stockholders' deficit.  

The Company completed the quarter with $3.3 million in cash and
cash equivalents.  The Company's accounts receivable were
$4.3 million as of June 30, and the company completed the quarter
with $1.7 million of borrowing availability on its $4 million line
of credit.

"While we saw an increase in deal closings during the second
quarter, specifically with our partner Sun Microsystems, our
reported results are below our expectations," commented Bill
Lyons, chairman and CEO of AXS-One.  "We continue to experience
lengthy sales cycles which resulted in a number of deals that were
anticipated to close being pushed out into subsequent quarters.
However, recently released industry studies that highlight AXS-
One's complete integrated platform solution validate our belief
that our software is appropriately positioned within this growing
and dynamic market.  These factors, combined with improved
execution on our sales pipeline, should allow us to grow revenues
and continue our progress toward a return to profitability."

A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?1031

                       About AXS-ONE Inc.

AXS-One Inc. (AMEX: AXO) -- http://www.axsone.com/-- provides  
high performance Records Compliance Management solutions.  The
AXS-One Compliance Platform enables organizations to implement
secure, scalable and enforceable policies that address records
management for corporate governance, legal discovery and industry
regulations such as SEC17a-4, NASD 3010, Sarbanes-Oxley, HIPAA,
The Patriot Act and Gramm-Leach Bliley.  Headquartered in
Rutherford, New Jersey, AXS-One has offices worldwide including in
the United States, Australia, Singapore, United Kingdom and South
Africa.


BALL CORP: Earns $132.7 Million in 2006 Second Quarter
------------------------------------------------------
Ball Corporation reported second quarter earnings of
$132.7 million on sales of $1.84 billion, compared to $79 million
on sales of $1.55 billion in the second quarter of 2005.

For the first six months of 2006, Ball's earnings were
$177.3 million on sales of $3.21 billion, compared to
$137.6 million on sales of $2.88 billion in 2005.

The 2006 second quarter includes a $74.1 million gain for
insurance recovery from a fire that occurred April 1 at a beverage
can manufacturing plant in Germany.  The 2005 second quarter and
first half results include an after-tax charge of $5.9 million, or
five cents per diluted share, related to the closing of a food can
manufacturing plant in Quebec.

"Though the insurance accounting gain skews our second quarter
results, when you put that aside we still had a solid quarter,"
said R. David Hoover, chairman, president and chief executive
officer.  "Sales and earnings in the quarter were up in our
packaging segments.  Integration of the two businesses acquired at
the end of the first quarter is underway.  Beverage can volumes
were strong in North America and Europe/Asia.  We are proceeding
to replace the production capacity lost to the fire and we plan to
have the replacement capacity operating in the second quarter of
2007.  Overall we are positive about the outlook as we move into
the second half of 2006."

                    Metal Beverage Packaging

Earnings in the quarter for the metal beverage packaging,
Americas, segment were $67.4 million on sales of $740.6 million.  
A year ago second quarter earnings in the segment were
$67.4 million on sales of $664.5 million.  For the first six
months, earnings were $121.9 on sales of $1.33 billion, compared
to $129.2 million on sales of $1.21 billion in 2005.

                    Metal Beverage Packaging

Second quarter earnings in the metal beverage packaging,
Europe/Asia, segment were $142.5 million including $74.1 million
of earnings due to the insurance accounting gain in 2006 on sales
of $433.8 million, compared to $58.2 million on sales of
$394.3 million in 2005.  For the first six months segment earnings
were $171.1 million, including the $74.1 insurance accounting
gain, on sales of $734.7 million, compared to $88.5 million on
sales of $692.3 million in the first half of 2005.

            Metal Food & Household Products Packaging

Earnings for the second quarter in the metal food and household
products packaging, Americas, segment were $12.8 million on sales
of $314.2 million, compared to a $6 million loss that includes
an $8.8 million business consolidation charge on sales of
$179.1 million in the second quarter of 2005.  Through two
quarters segment earnings were $14.6 million on sales of
$503.5 million, compared to $7 million, which includes an
$8.8 million business consolidation charge on sales of $363.3 in
the first half of 2005.

                        Plastic Packaging

Second quarter earnings in the plastic packaging, Americas,
segment were $7.4 million on sales of $178.5 million, compared to
$4.7 million on sales of $133.4 million in the second quarter of
2005.  For the first six months earnings in the segment were
$9.2 million on sales of $300.9 million, compared to $8.2 million
on sales of $249.2 million in the first half of 2005.  The second
quarter and first six months of 2006 also included increased costs
of $1.2 million related to purchase accounting adjustments to step
up the value of acquired finished goods inventory to fair market
value.

                   Aerospace and Technologies

Earnings were $8.3 million on sales of $175.4 million in the
aerospace and technologies segment in the second quarter of 2006,
compared to $14.9 million on sales of $180.7 million in the second
quarter of 2005.  For the first half of 2006, earnings were $17.8
million on sales of $335.3 million, compared to $23.8 million on
sales of $362.7 million in the first six months of 2005.

                            Outlook

"We are generally pleased with our second quarter results," Mr.
Hoover said.  "We ended the first quarter with a number of
uncertainties arising out of our April 1 fire, the new beverage
container redemption system in Germany, the threat of a possible
disruption at a major aluminum supplier and the integration of two
businesses acquired within days of each other.

"As a result we are more confident about the outlook for 2006 than
we were at the end of the first quarter and see a stronger second
half of the year.  Still, we realize there is a lot of work to do.  
We have to rebuild the lost capacity in Europe; aggressively
pursue the synergies and benefits we anticipate from our
acquisitions; complete the capital spending projects we have
underway and begin to realize the cost savings associated with
them; work through the delays in awarding and funding of projects
that are affecting our aerospace and technologies segment; and
continue to push cost recovery initiatives throughout our
reporting segments."

A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?1040

Headquartered in Broomfield, Colorado, Ball Corporation --
http://www.ball.com/-- is a supplier of high-quality metal and   
plastic packaging products and owns Ball Aerospace & Technologies
Corp., which develops sensors, spacecraft, systems and components
for government and commercial customers.  Ball reported 2005 sales
of $5.7 billion and the company employs 13,100 people worldwide.

                         *     *     *

Moody's Investors Service assigned ratings to Ball Corp's
$500 million senior secured term loan D, rated Ba1, and
$450 million senior unsecured notes due 2016-2018, rated Ba2.  It
also affirmed existing ratings, which include Ba1 Ratings on
$1.475 billion senior secured credit facilities and $550 million
senior unsecured notes due Dec. 12, 2012.  The ratings outlook is
stable.

Fitch affirmed Ball Corp.'s 'BB' issuer default rating, 'BB+'
senior secured credit facilities, and 'BB' senior unsecured notes.

Standard & Poor's Ratings Services also affirmed its 'BB+'
corporate credit rating on Ball Corp.

All ratings were placed in March 2006.


BENCHMARK ELECTRONICS: Earns $27.5 Mil. in Quarter Ended June 30
----------------------------------------------------------------
Benchmark Electronics, Inc., reported sales of $749 million for
the quarter ended June 30, 2006, compared to $561 million for the
same quarter last year.  

Second quarter net income was $27.5 million.  In the comparable
period last year, net income was $18.7 million.  Excluding
restructuring charges and the impact of stock-based compensation
costs, the Company had net income before special items of
$29.4 million, in the second quarter of 2006.

"We experienced a strong second quarter with solid year-to-date
growth in each of the industry sectors that we serve.  Our
commitment and focus on improving our operational effectiveness
will drive Benchmark's continued success," stated Benchmark's
President and CEO Cary T. Fu.

Second quarter 2006 financial highlights include:

     -- operating margin for the second quarter was 4.4% on a GAAP
        basis and was 4.7%, excluding restructuring charges and
        the impact of stock-based compensation expenses.

     -- cash flows provided by operating activities for the second
        quarter was $1.9 million.

     -- cash and short-term investments balance at June 30, 2006
        of $282 million.

     -- no debt outstanding.

     -- accounts receivable balance at June 30, 2006 of
        $443 million.

     -- inventory of $481 million at June 30, 2006; inventory
        turns were 5.8 times.

                          2006 Guidance

Revenues for the third quarter of 2006 are expected to be between
$710 million and $750 million.  The Company also raises its full
year guidance.  Revenues for 2006 are now expected to be between
$2.76 billion and $2.85 billion.

A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?1041

                         About Benchmark

Benchmark Electronics, Inc. -- http://www.bench.com/--   
manufactures electronics and provides its services to original
equipment manufacturers of computers and related products for
business enterprises, medical devices, industrial control
equipment, testing and instrumentation products, and
telecommunication equipment.  Benchmark's global operations
include facilities in eight countries. Benchmark's Common Shares
trade on the New York Stock Exchange under the symbol BHE.

                         *     *     *

Standard & Poor's rated the Benchmark's Long term foreign issuer
credit and Long term local issuer credit at BB-.  S&P assigned
those ratings on July 2003.

Moody's rated Benchmark's Long term corporate family rating at
Ba3; Bank loan debt at Ba2; and Equity linked at B2.  The ratings
were assigned on March 2003.


BERRY-HILL: Court Approves $21 Mil. American Capital DIP Financing
------------------------------------------------------------------
As reported in the Troubled Company Reporter on Aug. 23, 2006,
American Capital Strategies, Ltd., disclosed it is providing a
$21 million in debtor-in-possession financing to Berry-Hill
Galleries Inc.  American Capital's loan is secured by the
Company's prime Manhattan real estate and its art inventory.

The U.S. Bankruptcy Court for the Southern District of New York
allowed Berry-Hill and its debtor-affiliate, Coram Capital, LLC,
on a final basis, to borrow $21 million from American Capital
Strategies, Ltd.  The Debtor will use the loan proceeds to pay
down obligations owed to ACG Credit Company, LLC.

Matthew K. Kelsey, Esq., at Kramer Levin Naftalis & Frankel LLP,
in New York City, told the Court that the Debtors have expended
significant efforts over the past several months exploring various
ways to:

   (1) generate funds to satisfy certain pay down obligations owed
       to ACG pursuant to the Court's stipulated cash collateral;
       and

   (2) formulate a plan for emergence from chapter 11.

Berry-Hill owes ACG approximately $17.4 million.  Absent funds to
pay this debt, ACG may assert that it is entitled to exercise
its remedies under the Cash Collateral Stipulation, including
seeking to lift the automatic stay in an effort to foreclose on
Berry-Hill's assets (appraised at over $60 million).  Such a
result would cause considerable harm to Berry-Hill's estate and
unsecured creditors.

The rest of the DIP loan will also be used as working capital an
to pay the fees and expenses of professionals hired in the
Debtors' chapter 11 cases.

The terms of the DIP Loan are:

Maturity Date: Borrowings under the DIP Credit Agreement will be
               repaid in full, at the earlier of:

               (a) 270 from the closing date; and

               (b) the occurrence of the effective date of a plan
                   of reorganization of either or both of the
                   Debtors.

Lender Fees:   $1,200,000 fully earned upon entry of the Interim
               DIP Order, of which $700,000 will be payable upon
               court approval of interim funding and $500,000 will
               be payable on the Maturity Date and to be
               creditable against commitment fees on any exit
               transaction if provided by the DIP Lender.

Interest Rate: LIBOR plus 10.5%, payable in cash monthly in
               arrears on the first business day of each month.

Default Interest: During the continuance of an Event of Default,
               the DIP Loan will bear interest at an additional
               5% per annum.

To secure repayment of the DIP Loan, the Debtors have agreed to
provide the DIP Lender with:

   -- first priority liens on all of Berry-Hill's assets,
      including a mortgage on the Real Estate;

   -- a second priority lien on all of the assets of Coram; and

   -- superpriority administrative expense claims.

As part of the DIP Collateral, the DIP Lender is obtaining a
mortgage on certain real estate located at 11 East 70th Street,
New York City, Units Commercial Space (Gallery), 1A, and 4B, which
are owned by Berry-Hill.  Consignment Artwork is expressly
excluded from the DIP Collateral.

The DIP lien is subject to existing liens and security interests
of ARCK Credit Company, LLC, and to the carve-out.   The carve-out
will be used to pay:

   (1) the unpaid fees of the U.S. Trustee or the Clerk of the
       Bankruptcy Court pursuant to Sections 1930(a) and (b) of
       the Judiciary Procedures Code;

   (2) the reasonable fees and expenses of a trustee allowed under
       Section 726(b) of the Bankruptcy Code in an aggregate
       amount not to exceed $25,000; and

   (3) the aggregate allowed unpaid fees and expenses payable
       under Sections 330 and 331 of the Bankruptcy Code to
       professionals retained by the Debtors or the Official
       Committee of Unsecured Creditors or of a Chief
       Restructuring Officer in an amount not to exceed
       $1.5 million.

                     About American Capital

American Capital Strategies, Ltd. (Nasdaq: ACAS) --
http://www.americancapital.com/-- is a publicly traded buyout and
mezzanine fund with capital resources of $8.9 billion.  American
Capital invests in and sponsors management and employee buyouts,
invests in private equity buyouts, provides capital directly to
early stage and mature private and small public companies and
through its asset management business is a manager of debt and
equity investments in private companies.  American Capital
provides senior debt, mezzanine debt and equity to fund growth,
acquisitions, recapitalizations and securitizations.

                    About Berry-Hill Galleries

Headquartered in New York, New York, Berry-Hill Galleries, Inc.
-- http://www.berry-hill.com/-- buys paintings and sculpture
through outright purchase or on a commission basis and also
exhibits artworks.  The Debtor and its affiliate, Coram Capital
LLC, filed for chapter 11 protection on Dec. 8, 2005 (Bankr.
S.D.N.Y. Case Nos. 05-60169 & 05-60170).  Robert T. Schmidt, Esq.,
at Kramer, Levin, Naftalis & Frankel, LLP, represents the Debtors
in their restructuring efforts.  Robert J. Feinstein, Esq., at
Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., represents
the Official Committee of Unsecured Creditors.  When the Debtors
filed for protection from their creditors, they estimated assets
between $10 million and $100 million and debts between $1 million
and $50 million.


CALPINE CORP: CCFC Seeks Waiver Consents from Senior Noteholders
----------------------------------------------------------------
Calpine Construction Finance Company, L.P., and CCFC Finance Corp.
have commenced a consent solicitation for holders of record as of
Aug. 17, 2006, to seek consents to amendments to the indenture
governing their $415,000,000 principal amount of Second Priority
Senior Secured Floating Rate Notes due 2011.  CCFC also is
requesting consents to similar amendments from the lenders under
the credit and guarantee agreement governing its $385,000,000
First Priority Senior Secured Institutional Term Loans due 2009.

Pursuant to the proposed amendments, CCFC will cause the gas sale
and power purchase agreement between CCFC and Calpine Energy
Services, L.P. to be assumed, no later than Nov. 13, 2006, by CES
in the Chapter 11 bankruptcy proceeding filed by Calpine
Corporation, the Company's ultimate parent, and certain of Calpine
Corporation's controlled subsidiaries, including CES.  In
consideration for the assumption of the PPA, under the proposed
amendments, CCFC will agree to accept a general unsecured claim in
the bankruptcy proceeding in satisfaction of certain amounts owed
to CCFC by CES under the PPA.  The amendments also will provide
CCFC with limited relief from financial reporting and certain
other obligations under the Indenture and Credit Agreement.

With respect to the Indenture, a supplemental indenture setting
forth the amendments to the Indenture and certain agreements by
CCFC will be executed following receipt by the Company of the
consent of Holders of at least a majority in aggregate principal
amount of outstanding Notes.  With respect to the Credit
Agreement, an amendment agreement setting forth the amendments to
the Credit Agreement and agreements by CCFC will be executed
following receipt by CCFC of the consent of Lenders holding more
than 50% of the aggregate outstanding Term Loans.

The effectiveness of each of the supplemental indenture and
amendment agreement is conditioned, among other things, upon the
effectiveness of the other.  The supplemental indenture and
amendment agreement will be effective immediately upon
satisfaction of the conditions precedent to their effectiveness,
which may occur prior to the expiration of the consent
solicitation under the Indenture and the request for amendments
under the Credit Agreement.  Consents given in the consent
solicitation may be revoked at any time prior to the effectiveness
of the amendment under the Indenture, but not thereafter.

Upon their effectiveness, the supplemental indenture and amendment
agreement will implement the amendment for all Holders of the
Notes and Lenders under the Term Loans respectively whether or not
they provided their consent.

The consent solicitation under the Indenture and amendment request
under the Credit Agreement will expire at 5:00 p.m., New York City
time, on Aug. 25, 2006, unless extended.

The consent solicitation may be amended, extended or terminated,
at the option of the Company, as set forth in the solicitation
letter and consent form from the Company.  For a complete
statement of the terms and conditions of the consent solicitation,
Holders of the Notes should refer to the solicitation letter and
consent form.

Global Bondholder Services Corporation will act as Information
Agent in connection with the consent solicitation.  Questions
concerning the terms of the consent solicitation, and requests for
copies of the solicitation letter, the consent form or other
related documents should be directed to the Information Agent by
calling (866) 736-2200.  Wilmington Trust Company will act as
Tabulation Agent.  Requests for assistance in delivering consents
should be directed to the Tabulation Agent at (302) 636-6181.

Goldman Sachs Credit Partners L.P. is the administrative agent
under the Credit Agreement.

                   About Calpine Construction

Calpine Construction Finance Company, L.P., is an indirect
subsidiary of Calpine Corporation.  It was formed to develop, own
and operate power generating facilities.  CCFC currently owns and
operates six natural gas-fired, combined-cycle facilities located
in California, Texas, Oregon, Florida and Maine, which have a
combined estimated peak capacity of nearly 3,700 megawatts.  CCFC
Finance Corp. is a direct subsidiary of CCFC that was formed
solely to act as co-issuer of the Notes.

                       About Calpine Corp.

Headquartered in San Jose, California, Calpine Corporation
(OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies  
customers and communities with electricity from clean, efficient,
natural gas-fired and geothermal power plants.  Calpine owns,
leases and operates integrated systems of plants in 21 U.S. states
and in three Canadian provinces.  Its customized products and
services include wholesale and retail electricity, gas turbine
components and services, energy management and a wide range of
power plant engineering, construction and maintenance and
operational services.

The Company filed for chapter 11 protection on Dec. 20, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-60200).  Richard M. Cieri, Esq.,
Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G.
Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their
restructuring efforts.  Michael S. Stamer, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors.  As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities.


CATHOLIC CHURCH: Lawyer Suggests Parishioners Help Raise Funds
--------------------------------------------------------------
Timothy D. Kosnoff, Esq., at Seattle, Washington, who represents
sex-abuse claimants in the Catholic Diocese of Spokane's Chapter
11 case, said the Diocese can go out of bankruptcy and resolve the
sexual abuse cases for $60,000,000, the SpokesmanReview.com
reports.  

Mr. Kosnoff suggested that the Diocese and the parishioners take
an equal share in the settlement cost, SpokesmanReview staff
writer John Stucke relates.  The Diocese already has pooled
$30,000,000 from asset sales and insurance settlements, Mr.
Stucke notes.

To come up with the other $30,000,000, each parishioner should
contribute $2.05 every day for two years, Mr. Kosnoff said,
pointing out that the amount is less than the cost of a caffe
latte.  Mr. Kosnoff told SpokesmanReview that the "latte-a-day
plan" assumes that 20,000 of the 93,000 Spokane Catholics would
help finance the $60,000,000 settlement.  If each of the 93,000
parishioners pays, the sum would be far less, Mr. Kosnoff added.

SpokesmanReview says parties-in-interest, including Shaun M.
Cross, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, in
Spokane, Washington, the Diocese's attorney, and Ford Elsaesser,
Esq., at Elsaesser Jarzabek Anderson Marks Elliott & McHugh, in
Sandpoint, Idaho, who represents the Association of Parishes in
the bankruptcy case, gave no comment on Mr. Kosnoff's $60,000,000
settlement proposal.

The mediation in the Diocese's case will continue in Spokane this
week before Judge Zive, to consider several issues including
District Court Judge Quackenbush's ruling that parishes are
separate and distinct from the Diocese and can, therefore, sue and
be sued.

The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004.  Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts. (Catholic Church Bankruptcy News,
Issue No. 66; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


CATHOLIC CHURCH: Spokane Wants Oregon Auto Settlement Pact Okayed
-----------------------------------------------------------------
The Catholic Diocese of Spokane asks Judge Williams of the U.S.
Bankruptcy Court for the Eastern District of Washington to:

   (a) approve the Settlement Agreement with Oregon Automobile
       Insurance Company;

   (b) approve the sale of the Oregon Auto Policies to Oregon
       Auto; and

   (c) find that all claims held by "causal link" claimants whose
       interests are represented by the Future Claims
       Representative are "claims" as that term is defined in
       Section 101(5) of the Bankruptcy Code.

Oregon Automobile issued to the Diocese insurance policies for the
coverage period Feb. 1, 1972, through Feb. 1, 1976.  

The Diocese tendered prepetition to Oregon Auto the defense of
certain tort claims allegedly arising within the coverage years of
the Oregon Auto Policies.  As a result, prior to the Petition
Date, Oregon Auto paid out approximately $750,000 in connection
with defense and indemnity costs for tort claims against the
Diocese.  

Morning Star Boys' Ranch, a separately incorporated nonprofit
residential group home for boys, also has asserted that certain
tort claims against it are covered by the Oregon Auto Policies.  

The Diocese and its insurers, including Oregon Auto, have pending
disputes before the U.S. District Court for the Eastern District
of Washington regarding the nature and scope of their
responsibilities under the various insurance policies with respect
to tort claims.    

The Diocese has determined that it is in the best interest of its
estate and its creditors to reach an expedited resolution of all
the disputes relating to Oregon Auto Policies.  As a result, the
Diocese and Oregon Auto reached a comprehensive resolution of the
Coverage Disputes.

The principal terms of the Settlement Agreement are:

   (a) Oregon Auto will pay the Diocese $6,000,000:

       (1) $5,000,000 after entry of final orders in Bankruptcy
           and Federal District Court approving the Settlement
           and entry of an order confirming a plan of
           reorganization for Spokane that contains a channeling
           injunction in Oregon Auto's favor, but in any event,
           no earlier than Feb. 1, 2007; and

       (2) $1,000,000 on satisfaction of certain conditions, but
           in any event, no earlier than March 31, 2010;

   (b) The Diocese will use all sums received under the
       Settlement Agreement to indemnify Tort Claimants;

   (c) The Diocese and Oregon Auto will exchange releases for all
       their claims and obligations, including those claims
       related to the Coverage Action and all claims for
       reimbursement of a $750,000 representing payment for the
       Diocese's defense and indemnity claims;

   (d) The Diocese will sell the Oregon Auto Policies back to
       Oregon Auto free and clear of all liens, claims
       encumbrances and other interests with the sole exception
       of the alleged rights, if any, held by Morning Star; and

   (f) The effectiveness of the settlement is conditioned upon
       final orders:

        (i) of the Bankruptcy Court approving the Settlement
            Agreement, and the District Court barring all
            equitable contribution or other claims against Oregon
            Auto by other parties to the Coverage Action; and

       (ii) confirming a plan of reorganization incorporating the
            Settlement and including a channeling injunction in  
            favor of Oregon Auto.

A full-text copy of the Settlement Agreement with Oregon Auto is
available for free at http://researcharchives.com/t/s?103b

The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004.  Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts. (Catholic Church Bankruptcy News,
Issue No. 67; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


CITATION CORP: Ford's Production Cuts Cue S&P's Negative Watch
--------------------------------------------------------------
Standard & Poor's Ratings Services placed Citation Corp.'s rating
on CreditWatch with negative implications.  The CreditWatch
placements reflect Standard & Poor's decision to review the
company's rating in light of Ford Motor Co.'s announcement that
it will sharply lower its North American production in the
second half of 2006, with the largest cuts coming in the fourth
quarter.

Ford's production of light trucks in the fourth quarter will be
down 155,000 units, or 28%, versus fourth-quarter 2005 production.
These cuts will adversely affect on several fronts those suppliers
with substantial Ford exposure.

Fourth-quarter cash flow and liquidity will likely be reduced from
previous expectations, perhaps significantly.  The magnitude of
the reduction in liquidity will depend on other calls on cash in
the quarter, availability under existing bank facilities, and any
mitigating actions, although such offsets within the quarter may
be limited.

The long-term effect on supplier ratings will depend on Ford's
ability to stem its market share losses, which will drive 2007
production levels.  Ford's very dramatic fourth-quarter production
cuts may turn out to be an alternative to lesser cuts extending
over several quarters into 2007.  But the negative effect on cash
flow and liquidity in the fourth quarter will increase challenges
for certain suppliers in 2007, regardless of whether more stable
production levels occur in 2007.

Standard & Poor's will assess the effect of Ford's announcement in
light of the other business challenges facing Citation Corp.  
Standard & Poor's expects to conclude its reviews within the next
two months.

Rating Placed on Creditwatch With Negative Implication:

                            To                 From
                            --                 ----
  Citation Corp.:     B-/Watch Neg./--    B-/Negative/--


COLLINS & AIKMAN: Outlines Procedures for Abandoning GE Equipment
-----------------------------------------------------------------
In connection with the wind-down of their fabrics business and
other miscellaneous operations, Collins & Aikman Corporation and
its debtor-affiliates obtained authority from the U.S. Bankruptcy
Court for the Eastern District of Michigan to sell or abandon
equipment in which General Electric Capital Corporation asserts an
interest, pursuant to these procedures:

   (a) The Debtors will identify to GECC any Equipment that the
       Debtors claim to be economically obsolete or surplus to
       their needs.

   (b) The Debtors will give GECC seven days' notice of the
       opportunity to retain the Equipment.  The Debtors and GECC
       reserve their rights as to the value of any Equipment
       retained by GECC.

   (c) If GECC does not elect to retain the Equipment, the
       Debtors will sell the Equipment in a commercially
       reasonable manner to the highest bidder; provided that the
       Debtors are authorized to abandon the Equipment if it
       would be more economical for them.

In the event of any sale of the Equipment, the Debtors will
deposit and hold the proceeds in an interest bearing segregated
account pending further Court order or final resolution of GECC's
claims against the Debtors.

In the event that the Debtors' Master Lease Agreements with GECC
are re-characterized as secured financing agreements, the Debtors'
interest in the sale proceeds, if any, will be subject to the
terms and conditions of the Amended and Restated Revolving Credit,
Term Loan and Guaranty Agreement, dated as of July 28,
2005.

Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit   
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems.  The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world.  The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927).  Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring.  Lazard Freres & Co., LLC,
provides the Debtor with investment banking services.  Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee.  When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 36; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or   
215/945-7000)


COMPLETE RETREATS: R. Glanville Balks at Compensation Procedure
---------------------------------------------------------------
Robert Glanville raises his objection to Complete Retreats LLC and
its debtor-affiliates' request for interim procedures for
compensating and reimbursing professionals approved by the U.S.
Bankruptcy Court for the District of Connecticut.

In their request, the Debtors specifically proposed that:

   (a) By the 20th day of each month, after the month for which
       compensation is sought, each Professional will serve a
       monthly statement to:

       * the Debtors,
       * the counsel for the Debtors,
       * the counsel for the Debtors' postpetition DIP lenders,
       * the counsel for the Creditors Committee; and
       * the Office of the United States Trustee.

       The first Monthly Statement will be due on Sept. 20, 2006,
       for the period covering the Debtors' bankruptcy filing
       through and including Aug. 31, 2006;

   (b) Any party that objects to a Monthly Statement is required
       to serve on the Affected Professional and the Notice
       Parties, within 20 days after the service of the Monthly
       Statement, a written statement that:

         -- describes the precise nature and basis of the
            Objection; and

         -- specifies the amount of objectionable fees or
            expenses at issue;

   (c) If an Objection is served, the Objecting Party and the
       Affected Professional are required to make a good-faith
       attempt to resolve the Objection on a consensual basis.
       All Objections that are not resolved by the parties will
       be preserved and presented to the Court at the next
       interim or final fee application hearing;

   (d) If no Objection to a Monthly Statement has been served
       prior to the relevant Objection Deadline, the Affected
       Professional will serve on the Debtors and their counsel a
       certification that there has been no Objection to its
       Monthly Statement, and the Debtors are authorized to pay
       80% of the sought fees and 100% of the sought expenses.

       If an Objection is timely served, the Affected
       Professional will serve on the Debtors and their counsel a
       certification indicating that there has been an Objection
       and stating the total fees and expenses in the Monthly
       Statement not subject to the Objection.  The Debtors are
       then authorized to pay the Affected Professional an amount
       equal to 80% of the fees and 100% of the expenses not
       subject to the Objection;

   (e) From Jul. 23, 2006 through Oct. 31, 2006, and at four-
       month intervals afterwards, each Professional will file
       with the Court, within 30 days of the end of the Interim
       Fee Period, an interim fee application for interim Court
       approval and allowance of 100% of the compensation and
       expense reimbursement sought in the Monthly Statements
       served during the Interim Fee Period;

   (f) If an Objection to all or part of the Interim Fee
       Application is timely and properly filed within 30 days
       from the filing of the Interim Fee Application, the
       Objection will be considered at the Interim Fee Hearing;

   (g) If no Objection to the Interim Fee Application is timely
       and properly filed by the applicable Fee Objection
       Deadline, the Professional will file with the Court and
       serve on the Debtors and their counsel a certification
       that there have been no Objections to its Interim Fee
       Application;

   (h) The Court will convene an Interim Fee Hearing on pending
       Interim Fee Applications, once every four months.  The
       Debtors will provide notice of all Interim Fee Hearings to
       the Notice Parties; and

   (i) A pending objection to a Monthly Statement or an Interim
       Fee Application will not disqualify a Professional from
       the future payment of compensation or reimbursement of
       expenses that are requested in accordance with the
       Compensation Procedures.

Mr. Glanville complains that the proposed Compensation Procedures
do not require the Court-approved professionals to file Monthly
Fee Statements with the Court or serve them on parties-in-
interest.  Thus, the fees and expenses incurred by retained
professionals will not be publicly disclosed until the first
formal fee applications, which under the proposed Compensation
Procedures will not be filed until Nov. 30, 2006.

The first Monthly Statements, for the period from the Petition
Date through Aug. 31, 2006, will be served on Sept. 20, 2006.

"In many chapter 11 cases, this time lapse might be
inconsequential, but that is not true [in the Debtors' case],"
Thomas D. Goldberg, Esq., at Day, Berry & Howard LLP, in
Stamford, Connecticut, argues.  "According to the Debtors' own
filings, many of the decisions regarding the reorganization of
the Debtors and the financing of the reorganization must be made
within the coming weeks.  Thus, information regarding the
estates' administrative obligations should be available to
creditors on a current basis."

Accordingly, Mr. Glanville asks the Court to require the Debtors
to file the Monthly Statements with the Court and be made
available on the electronic docket, in addition to being served
on the Debtors, the counsel for the Debtors, the counsel for the
Official Committee of Unsecured Creditors and the Office of the
U.S. Trustee.

Mr. Goldberg asserts that the disclosure is necessary because it
will promote transparency, and thus will give the members of
Complete Retreats destination clubs more confidence in the
ongoing reorganization process.  The disclosure will also permit
club members and other creditors to understand the ongoing costs
of administering the estate.

Furthermore, the Debtors' ability to reorganize may be determined
long before the first formal fee applications are filed in
November 2006, Mr. Goldberg notes.  One looming issue is whether
members will pay annual dues installments in late September 2006.  
That may depend in turn on whether the members have confidence in
the Debtors' ability to reorganize and whether the Debtors are
frankly disclosing ongoing costs, including professional fees,
Mr. Goldberg says.

Requiring the professionals to file Monthly Statements will not
impose an undue burden on the professionals of the estate, Mr.
Goldberg contends.

The applicable professionals are very experienced in filing fee
applications, and can formulate the work descriptions in the
Monthly Statements without disclosing privileged or other
confidential information, Mr. Goldberg asserts.  Finally, to the
extent there is a concern that a particular work description may
jeopardize privilege or confidentiality, the entry can simply be
redacted, Mr. Goldberg adds.

                     About Complete Retreats

Headquartered in Westport, Connecticut, Complete Retreats LLC
operates five-star hospitality and real estate management
businesses.  In addition to its mainline destination club
business, the Debtor also operates an air travel program for
destination club members, a villa business, luxury car rental
services, wine sales services, fine art sales program, and other
amenity programs for members.  Complete Retreats and its debtor-
affiliates filed for chapter 11 protection on July 23, 2006
(Bankr. D. Conn. Case No. 06-50245).  Nicholas H. Mancuso, Esq.
and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in
their restructuring efforts.  Michael J. Reilly, Esq., at Bingham
McCutchen LP, in Hartford, Connecticut, serves as counsel to the
Official Committee of Unsecured Creditors.  No estimated assets
have been listed in the Debtors' schedules, however, the Debtors
disclosed $308,000,000 in total debts.  (Complete Retreats
Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


COMPLETE RETREATS: U.S. Trustee Says Professional Fees Can Wait
---------------------------------------------------------------
Diana G. Adams, the Acting United States Trustee for Region 2,
raises her objection to Complete Retreats LLC and its debtor-
affiliates' request for interim procedures for compensating and
reimbursing professionals approved by the U.S. Bankruptcy Court
for the District of Connecticut.

In their request, the Debtors specifically proposed that:

   (a) By the 20th day of each month, after the month for which
       compensation is sought, each Professional will serve a
       monthly statement to:

       * the Debtors,
       * the counsel for the Debtors,
       * the counsel for the Debtors' postpetition DIP lenders,
       * the counsel for the Creditors Committee; and
       * the Office of the United States Trustee.

       The first Monthly Statement will be due on Sept. 20, 2006,
       for the period covering the Debtors' bankruptcy filing
       through and including Aug. 31, 2006;

   (b) Any party that objects to a Monthly Statement is required
       to serve on the Affected Professional and the Notice
       Parties, within 20 days after the service of the Monthly
       Statement, a written statement that:

         -- describes the precise nature and basis of the
            Objection; and

         -- specifies the amount of objectionable fees or
            expenses at issue;

   (c) If an Objection is served, the Objecting Party and the
       Affected Professional are required to make a good-faith
       attempt to resolve the Objection on a consensual basis.
       All Objections that are not resolved by the parties will
       be preserved and presented to the Court at the next
       interim or final fee application hearing;

   (d) If no Objection to a Monthly Statement has been served
       prior to the relevant Objection Deadline, the Affected
       Professional will serve on the Debtors and their counsel a
       certification that there has been no Objection to its
       Monthly Statement, and the Debtors are authorized to pay
       80% of the sought fees and 100% of the sought expenses.

       If an Objection is timely served, the Affected
       Professional will serve on the Debtors and their counsel a
       certification indicating that there has been an Objection
       and stating the total fees and expenses in the Monthly
       Statement not subject to the Objection.  The Debtors are
       then authorized to pay the Affected Professional an amount
       equal to 80% of the fees and 100% of the expenses not
       subject to the Objection;

   (e) From July 23, 2006 through Oct. 31, 2006, and at four-
       month intervals afterwards, each Professional will file
       with the Court, within 30 days of the end of the Interim
       Fee Period, an interim fee application for interim Court
       approval and allowance of 100% of the compensation and
       expense reimbursement sought in the Monthly Statements
       served during the Interim Fee Period;

   (f) If an Objection to all or part of the Interim Fee
       Application is timely and properly filed within 30 days
       from the filing of the Interim Fee Application, the
       Objection will be considered at the Interim Fee Hearing;

   (g) If no Objection to the Interim Fee Application is timely
       and properly filed by the applicable Fee Objection
       Deadline, the Professional will file with the Court and
       serve on the Debtors and their counsel a certification
       that there have been no Objections to its Interim Fee
       Application;

   (h) The Court will convene an Interim Fee Hearing on pending
       Interim Fee Applications, once every four months.  The
       Debtors will provide notice of all Interim Fee Hearings to
       the Notice Parties; and

   (i) A pending objection to a Monthly Statement or an Interim
       Fee Application will not disqualify a Professional from
       the future payment of compensation or reimbursement of
       expenses that are requested in accordance with the
       Compensation Procedures.

The United States Trustee points out that the Debtors have not
yet filed their Schedules of Assets and Liabilities and
Statements of Financial Affairs.  In addition, the Debtors'
Meetings of Creditors have not been held.  "Even when begun, the
Meetings of Creditors cannot be closed until after the Debtors
have filed their respective schedules and statements of financial
affairs," the U.S. Trustee says.

The U.S. Trustee contends that the compensation of professionals
should wait until the filing of the Debtors' Schedules and
Statements.  Without those Schedules and Statements, it is not
possible to fully and accurately evaluate the Debtors' ability to
fund professional fees without risk to the bankruptcy estates.

Moreover, the U.S. Trustee asserts that it would be premature for
the Court to enter an order concerning interim compensation
procedures since it has not yet entered orders allowing the
employment and retention of professionals for the Debtors and the
Official Committee of Unsecured Creditors.

The Interim Compensation Motion proposes that professionals will
be paid regularly without the need to file a fee application
before payment, with formal fee applications being made every 120
days.  The U.S. Trustee suggests that to the extent the Court
will consider granting the Motion and in the interests of a full
disclosure of accruing fees, if a professional does not file a
fee application within 30 days of the end of each 120-day cycle,
that professional should forfeit the opportunity to receive any
further regular payments until the time its fee applications are
made and brought fully up-to-date.

Accordingly, the U.S. Trustee asks the Court to schedule a hearing
on the Debtors' request so that the issues it has presented may be
considered.

                     About Complete Retreats

Headquartered in Westport, Connecticut, Complete Retreats LLC
operates five-star hospitality and real estate management
businesses.  In addition to its mainline destination club
business, the Debtor also operates an air travel program for
destination club members, a villa business, luxury car rental
services, wine sales services, fine art sales program, and other
amenity programs for members.  Complete Retreats and its debtor-
affiliates filed for chapter 11 protection on July 23, 2006
(Bankr. D. Conn. Case No. 06-50245).  Nicholas H. Mancuso, Esq.
and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in
their restructuring efforts.  Michael J. Reilly, Esq., at Bingham
McCutchen LP, in Hartford, Connecticut, serves as counsel to the
Official Committee of Unsecured Creditors.  No estimated assets
have been listed in the Debtors' schedules, however, the Debtors
disclosed $308,000,000 in total debts.  (Complete Retreats
Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


COMPLETE RETREATS: Case Summary & 50 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Complete Retreats, LLC
        fdba Tanner & Haley Resorts
        fdba Tanner & Haley Worldwide Resorts
        fdba Tanner & Haley Worldwide
        fdba Tanner & Haley Destination Clubs
        fdba A & K Destinations
        fdba Abercrombie & Kent Destinations
        fdba Abercrombie & Kent Destination Clubs
        285 Riverside Avenue, Suite 310
        Westport, CT 06880
        Tel: (203) 291-5500

Bankruptcy Case No.: 06-50245

Debtor-affiliates filing separate chapter 11 petitions on
August 18, 2006:

      Entity                                     Case No.
      ------                                     --------
      DR Abaco, LLC                              06-50343

Debtor-affiliates filing separate chapter 11 petitions on
July 23, 2006:

   Entity                                             Case No.
   ------                                             --------
   Preferred Retreats, LLC                            06-50246
   LR Management Company, LLC                         06-50247
   New Retreats Holding Co., LLC                      06-50248
   T&H Villas, LLC                                    06-50249
   Town Clubs, LLC                                    06-50250
   Preferred Aviation, LLC                            06-50251
   Preferred Retreats Travel Company, LLC             06-50252
   Preferred Retreats Design Group, LLC               06-50253
   Private Retreats, LLC                              06-50254
   European Retreats, LLC                             06-50255
   Distinctive Retreats, LLC                          06-50256
   DR MGM I, LLC                                      06-50257
   DR MGM II, LLC                                     06-50258
   DR MGM III, LLC                                    06-50259
   DR MGM IV, LLC                                     06-50260
   Private Retreats Steamboat, LLC                    06-50261
   Private Retreats Steamboat II, LLC                 06-50262
   Private Retreats Telluride I, LLC                  06-50263
   Private Retreats Kamalani, LLC                     06-50264
   Private Retreats Tortuga, LLC                      06-50265
   Private Retreats Whitewing, LLC                    06-50266
   Private Retreats Belfair, LLC                      06-50267
   Private Retreats Cabin 4, LLC                      06-50268
   Private Retreats Cabin 8, LLC                      06-50269
   Private Retreats Colinas, LLC                      06-50270
   Private Retreats Yacht Club Tortola, LLC           06-50271
   Private Retreats Yacht Club Mediterranean, LLC     06-50272
   Private Retreats Teton I, LLC                      06-50273
   Private Retreats Snake River I, LLC                06-50274
   Private Retreats Snake River II, LLC               06-50275
   Private Retreats Stowe II, LLC                     06-50276
   Private Retreats Stowe III, LLC                    06-50277
   Private Retreats Preserve Way, LLC                 06-50278
   Private Retreats Highpoint, LLC                    06-50279
   Private Retreats Tortola, LLC                      06-50280
   Private Retreats Pinecone 305, LLC                 06-50281
   Private Retreats Deer Valley I, LLC                06-50282
   Private Retreats Tahoe I, LLC                      06-50283
   Private Retreats Tahoe II, LLC                     06-50284
   Private Retreats Tahoe III, LLC                    06-50285
   Private Retreats Belize, LLC                       06-50286
   Private Retreats Hospitality, LLC                  06-50287
   Private Retreats Powell II, LLC                    06-50288
   Private Retreats Powell III, LLC                   06-50289
   PR Esperanza II, LLC                               06-50290
   PR Esperanza III, LLC                              06-50291
   Olde Cypress I PR, LLC                             06-50292
   Olde Cypress II PR, LLC                            06-50293
   PR Vegas III, LLC                                  06-50294
   A&K Destinations, LLC                              06-50295
   A&K Luxury Automobiles, LLC                        06-50296
   Bermuda Cliffs, LLC                                06-50297
   Private Retreats II, LLC                           06-50298
   Private Retreats Nevis, LLC                        06-50299
   Distinctive Retreats II, LLC                       06-50300
   Legendary Retreats, LLC                            06-50301
   Private Retreats Casa Dorada, LLC                  06-50302
   Private Retreats Summit, LLC                       06-50303
   P180, LLC                                          06-50304
   DR Cerezas, LLC                                    06-50305
   Preferred Brokerage, LLC                           06-50306

Type of Business: Founded in 1998, the Debtors operate five-star
                  hospitality and real estate management
                  businesses and are pioneers and market leaders
                  of the destination club industry.  The Debtors
                  operate under the trade name Tanner & Haley
                  Resorts.  See http://www.akdestinations.com/  
                  and http://www.tannerandhaley.com/  

                  In addition to their mainline destination club
                  business, the Debtors also operate an air
                  travel program for destination club members, a
                  villa business, luxury car rental services,
                  wine sales services, fine art sales program,
                  and other amenity programs for members.
                  See http://www.tannerandhaleyjets.com/and
                  http://www.tannerandhaleyvillas.com/  

Chapter 11 Petition Date: July 23, 2006

Court: District of Connecticut (Bridgeport)

Judge: Alan H.W. Shiff

Debtors' Counsel: Nicholas H. Mancuso, Esq.
                  Jeffrey K. Daman, Esq.
                  Dechert LLP
                  90 State House Square
                  Hartford, Connecticut 06103
                  Tel: (860) 524-3950
                  Fax: (860) 524-3930

                       -- and --

                  Joel H. Levitin, Esq.
                  David C. McGrail, Esq.
                  Richard A. Stieglitz Jr., Esq.
                  Dechert LLP
                  30 Rockefeller Plaza
                  New York City 10112
                  Tel: (212) 698-3500
                  Fax: (212) 698-3599

Debtors' Financial
and Restructuring
Advisor:          XRoads Solutions Group, LLC
                  1821 East Dyer Road, Suite 225
                  Santa Ana, California 92705
                  Tel: (949) 567-1600
                  Fax: (949) 567-1655
                  http://www.xroadsllc.com/  

Estimated Assets:  Unknown

Total Debts:  $308,000,000

Debtors' Consolidated List of their 50 Largest Unsecured
Creditors:

  Entity                         Nature of Claim    Claim Amount
  ------                         ---------------    ------------
Janine Schlierf                   Litigation Claim       Unknown
59 Bob Hill Road
Ridgefield, CT 06877
c/o Koskoff, Koskoff & Bieder
350 Fairfield Avenue
Bridgeport, CT 06604
Tel: (203) 336-4421
Fax: (203) 368-3244

Gregory Wendt                    Membership Deposit   $1,300,000
1 Market Street
Stuart Tower 1800
San Francisco, CA 94105-1409
Tel: (415) 393-7161

Scott Walchek                    Membership Deposit   $1,300,000
295 Barrington Lane
Alamo, CA 94507
Tel: (925) 297-1212

Wil Vanloh                       Membership Deposit   $1,300,000
3208 Locke Lane
Houston, TX 77019

Ignacio Torras                   Membership Deposit   $1,300,000
777 Post Oak Boulevard
Suite 650
Houston, TX 77056
Tel: (713) 963-0066

Nick Thakore                     Membership Deposit   $1,300,000
11 Cranmore Road
Wellesley, MA 02481

Greg Newman                      Membership Deposit   $1,300,000
389 South Avenue
Alamo, CA 94507
Tel: (925) 820-1218

Peter Lowe                       Membership Deposit   $1,300,000
1370 South Ocean Boulevard
Manalasan, FL 33462

Len J. Lauer                     Membership Deposit   $1,300,000
2927 Verona Road
Mission Hills, KS 66208

Stephen Kaplan                   Membership Deposit   $1,300,000
434 Marguerita
Santa Monica, CA 90402

Mark Houghton-Berry              Membership Deposit   $1,300,000
Corner Green, South Drive
Virginia Water
Surrey GU 25 4JS

John Harvey                      Membership Deposit   $1,300,000
6805 Avondale
Oklahoma City, OK 73116
Tel: (405) 848-3560

Alan Fox                         Membership Deposit   $1,300,000
12411 Ventura Boulevard
Studio City, CA 91604
Tel: (818) 519-6666

Boyd Fellows                     Membership Deposit   $1,300,000
32 Shady Lane
Ross, CA 94957
Tel: (415) 456-4900

Richard Cornelius                Membership Deposit   $1,300,000
8 Camargo Pines Lane
Cincinnati, OH 45243
Tel: (513) 984-9440

Chris Stevens                    Membership Deposit     $750,000
1816 Tribute Road
Sacramento, CA 95815
Tel: (916) 643-1444

Piper Rudnick Gray Cary          Legal Services         $671,651
Douglas A. Rappaport, Esq.
1251 Avenue of the Americas
New York City, NY 10020
Tel: (212) 835-6000
Fax: (212) 835-6001

Intagio                          Media Services         $655,974
Roger Juntilla, Esq.
Steven Lewicky, Esq.
22 Fourth Street, Suite 1120
San Francisco, CA 94103
Tel: (415) 247-9500
Fax: (415) 284-5366

Abercrombie & Kent               Sales & Marketing      $532,462
1520 Kensington Road             Services
Oak Brook, IL 60523
Tel: (800) 323-7308
Fax: (630) 954-3324

Double AA Builders               Trade Debt             $503,883
Geoffrey E. Schwan, Esq.
Holden Brodman, Esq.
6040 East Thomas Road
Scottsdale, AZ 85251

Vickie Sanders                   Membership Deposit     $479,500
319 8th Avenue West
Kirkland, WA 98033
Tel: (425) 889-8218

Patricia Sullivan                Membership Deposit     $477,250
5445 Harbortown Circle
Prospect, KY 50059
Tel: (502) 228-5059

Guy Bond                         Membership Deposit     $475,000
2929 Allen Parkway, Suite 1530
Houston, TX 77019
Tel: (713) 526-4848

Carl Bufka                       Membership Deposit     $475,000
8735 Lapalama Lane
Naples, FL 34108
Tel: (239) 594-9129

Chad Carpenter                   Membership Deposit     $475,000
42366 North 111th Place
Scottsdale, AZ 85262
Tel: (480) 488-0301

Fred Gould                       Membership Deposit     $475,000
60 Cutter Mill Road
Great Neck, NY 11021
Tel: (516) 773-2747

William Green                    Membership Deposit     $475,000
14 Bluewater Hill
Westport, CT 06880
Tel: (203) 222-7890

Richard Korpan                   Membership Deposit     $475,000
31483 Morning Star
Evergreen, CO 80439
Tel: (303) 679-1708

Randy Heady                      Membership Deposit    $474,805
5320 Spring Valley Road
Suite 220
Dallas, TX 75254
Tel: (972) 661-1606

Tom Fallon                       Membership Deposit     $474,415
95 Patricia Drive
Atherton, CA 94027
Tel: (650) 839-1050

Joseph Cusimano                  Membership Deposit     $472,644
800 North Michigan Avenue
Apartment 4601
Chicago, IL 60611
Tel: (312) 867-0271

Jess Mogul                       Membership Deposit     $470,839
347 West 87th Street, Suite 1
New York City, NY 10024
Tel: (212) 875-9793

James Gray                       Membership Deposit     $460,000
3420 Oyster Bay Court
Cincinnati, OH 45244
Tel: (513) 561-7943

Steve Sadek                      Membership Deposit     $460,000
7855 North Pehasant Lane
River Hills, WI 53217
Tel: (414) 540-9510

Raymond Dee                      Membership Deposit     $452,895
938 Spanish Moss Trail
Naples, FL 34108
Tel: (239) 591-0161

Michael George                   Membership Deposit     $450,925
108 Quail Lane
Wayne, PA 19087
Tel: (610) 688-8145

Dennis Kavelman                  Membership Deposit     $450,473
557 Hemingway Place
Waterloo, N2TI24
Tel: (519) 885-8223

Bruce T. Bishop                  Membership Deposit     $450,450
1405 South Veaux Loop
Norfolk, VA 23509
Tel: (757) 628-5573

Paul Dietz                       Membership Deposit     $450,000
1025 East Maple, Suite 200
Birmingham, MI 48009
Tel: (248) 644-9163

John Georgius                    Membership Deposit     $450,000
466 Fenton Place
Charlotte, NC 28207-1918
Tel: (704) 333-9547

William Graham                   Membership Deposit     $450,000
4435 University Boulevard
Dallas, TX 75205
Tel: (340) 776-2287

George Greenwald                 Membership Deposit     $450,000
9504 East Rising Sun Drive
Scottsdale, AZ 85262
Tel: (970) 954-6379

Scott Rechler                    Membership Deposit     $450,000
2255 Broadhollow Road
Melville, NJ 11747
Tel: (631) 622-6622

James Verdorn                    Membership Deposit     $450,000
9203 Victoria Drive
Eden Prairie, MN 55347
Tel: (952) 906-0497

Tom White                        Membership Deposit     $450,000
2801 Van Dam Street
Lincoln, NE 68502
Tel: (402) 421-1604

David Whiting                    Membership Deposit     $450,000
P.O. Box 1108
Tustin, CA 92781-1108
Tel: (949) 499-4678

Jim Gilbert                      Membership Deposit     $448,635
9 Alden Road
Wellesley, MA 02481
Tel: (781) 237-6502

Keith Schumann                   Membership Deposit     $448,635
101 Laurel Keep
Williamsburg, VA 23185
Tel: (757) 220-8743

Arthur Epker                     Membership Deposit     $448,375
31 Candleberry Lane
Weston, MA 02493
Tel: (617) 526-8992

Brad Daugherty                   Membership Deposit     $447,903
1239 Cane Creek Road
Fletcher, NC 28732
Tel: (828) 277-7526


COMSTOCK RESOURCES: Buys Oil and Gas Properties for $67.2 Million
-----------------------------------------------------------------
Comstock Resources, Inc., agreed to purchase certain oil and gas
properties from Denali Oil & Gas Partners LP, Stalker Energy, LP
and other working interest owners for $67.2 million.

The transaction is expected to close in September 2006 and will be
funded with borrowings under the Company's bank credit facility.

With the acquisition, the Company will acquire producing
properties in the Las Hermanitas field in Duval County in South
Texas.  The properties being acquired include three producing
wells that are currently producing approximately 6.4 million cubic
feet of natural gas per day.  The Company estimates that the
properties have proved reserves of approximately 20.2 billion
cubic feet of natural gas.

The Company disclosed that approximately 43% of the proved
reserves are in the proved developed category.  The undeveloped
reserves primarily relate to four proved undeveloped locations to
be drilled.  Future development costs related to the proved
reserves are estimated to be $17.5 million.

"This transaction will build up our South Texas operating region
and has substantial upside beyond the proved reserves from the
eighteen identified drilling locations," M. Jay Allison, president
and chief executive officer, stated.
    
Comstock Resources, Inc. (NYSE: CRK), is an independent energy
company based in Frisco, Texas and is engaged in oil and gas
acquisitions, exploration and development primarily in Louisiana
and Texas and in the Gulf of Mexico through its ownership in Bois
d'Arc Energy, Inc. (NYSE: BDE).

                         *     *     *

Standard & Poor's Ratings Services assigned its 'B' senior
unsecured rating to Comstock Resources Inc.'s (BB-/Stable/--)
$175 million, 6.87% senior notes due 2012.  The outlook on
Comstock and all of its obligations remains stable.  The ratings
were assigned effective Feb. 2004.


CONGOLEUM CORP: Insurers & Bondholders File Competing Ch. 11 Plan
-----------------------------------------------------------------
Continental Casualty Company, Continental Insurance Company and
The Official Committee Of Bondholders appointed in the chapter 11
cases of Congoleum Corp., and its debtor-affiliates filed a
competing plan of reorganization and accompanying disclosure
statement on Aug. 18, 2006.

Mark Silver, Esq., at Coughlin Duffy, LLP, in Morristown, New
Jersey, tells the Court that the CNA/Committee Plan is a product
of extensive negotiations between CNA and the Bondholders'
Committee to propose a plan of reorganization for the Debtors that
is fair and equitable to all parties in interest, that provides
for sufficient financing to implement the reorganization and
insure its feasibility and that provides for the issuance of
injunctions under Sections 105(a) of the Bankruptcy Code that
result in the channeling of current asbestos-related Claims
against Congoleum to the Plan Trust.

The CNA/Committee Plan provides for, among other things, timely
payment in full of:

   * allowed administrative claims,
   * allowed priority tax claims,
   * allowed priority claims,
   * allowed secured claims,
   * allowed workers' compensation claims, and
   * allowed general unsecured claims.  

The CNA/Committee Plan also provides for the establishment of the
Plan Trust to satisfy Plan Trust Asbestos Claims.  

The CNA/Committee Plan will bind all parties holding Claims,
whether asserted or not, against the Debtors.

Some essential elements of the reorganization contemplated by the
CNA/Committee Plan include:

   (a) the creation of the Plan Trust which is intended to be a
       "qualified settlement fund" within the meaning of Section
       1.468B - 1(a) of the Treasury Regulations promulgated under
       Section 468B of the Internal Revenue Code, that will assume
       the liabilities of the Debtors with respect to all Plan
       Trust Asbestos Claims and will use Plan Trust Assets and
       income to pay Plan Trust Asbestos Claims as provided in the
       CNA/Committee Plan and the Trust Documents;

   (b) the funding of the Plan Trust with the Plan Trust Assets;

   (c) the classification of claims and interests and the
       treatment of those claims and interests under the
       CNA/Committee Plan;

   (d) the payment of Claims in accordance with the requirements
       of the Bankruptcy Code;

   (e) the establishment and implementation of the Trust
       Distribution Plan as provided in the Plan Trust Agreement
       for the fair and even-handed resolution of all Asbestos
       Personal Injury Claims;

   (f) the express agreement, conditioned upon the occurrence of
       the effective date of the Plan, by holders of Secured
       Asbestos Claims to Forbear from exercising:

       (1) the right to enforce or exercise any status or right as
           a secured party, including any rights in the collateral
           described in the Security Agreement;

       (2) the right to enforce or exercise any assignment or
           collateral assignment of insurance or insurance
           proceeds;

       (3) the right to any priority in payment arising from or
           related to either (1) or (2) immediately above; and

       (4) the right to seek payment of an Asbestos Personal
           Injury Claim based on a liquidated amount established
           under the Claimant Agreement and any Pre-Petition
           Settlement Agreement;

   (g) a procedure for addressing and resolving Plan Trust
       Disputed Claims, including the prosecution of proceedings
       to avoid certain alleged interests of the holders of Plan
       Trust Disputed Claims in property of the Debtors' estates
       and equitably subordinate certain Plan Trust Disputed
       Claims who do not agree to the forbearance;

   (h) the issuance of certain injunctions, including the
       discharge injunction, the supplemental injunction, and the
       asbestos channeling injunction;

   (i) replacement of the existing credit agreement, under which
       Wachovia Bank National Association, successor by merger to
       Congress Financial Corporation is lender, with a new Exit
       Facility, which will provide the Debtors with enhanced
       post-confirmation liquidity;

   (j) the Debtors' entry into the CNA Plan Implementation Loan in
       the amount of $22 million, with the loan proceeds to be
       used to fund certain payments to the Senior Note holders;

   (k) provisions for the governance and management of the
       Reorganized Debtors; and

   (l) the retention of jurisdiction by the Bankruptcy Court over
       various matters.

A full-text copy of the Disclosure Statement is available for a
fee at:

   http://www.researcharchives.com/bin/download?id=060823220241

                    About Congoleum Corporation

Based in Mercerville, New Jersey, Congoleum Corporation (AMEX:CGM)
-- http://www.congoleum.com/-- manufactures and sells resilient
sheet and tile floor covering products with a wide variety of
product features, designs and colors.  The Company filed for
chapter 11 protection on Dec. 31, 2003 (Bankr. N.J. Case No.
03-51524) as a means to resolve claims asserted against it related
to the use of asbestos in its products decades ago.

Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A.
Brennanat, Esq., at Pillsbury Winthrop Shaw Pittman LLP represent
the Debtors in their restructuring efforts.  Elihu Insulbuch,
Esq., at Caplin & Drysdale, Chartered, represents the Asbestos
Claimants' Committee.  R. Scott Williams serves as the Futures
Representative, and is represented by lawyers at Orrick,
Herrington & Sutcliffe LLP, and Ravin Greenberg PC.  Michael S.
Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the
Official Committee of Unsecured Bondholders.  When Congoleum filed
for protection from its creditors, it listed $187,126,000 in total
assets and $205,940,000 in total debts.

At June 30, 2006. Congoleum Corporation's balance sheet showed
a $44,013,000 stockholders' deficit compared to a $44,960,000
deficit at Dec. 31, 2005.  Congoleum is a 55% owned subsidiary of
American Biltrite Inc. (AMEX: ABL).


CONGOLEUM CORP: Inks $16.95 Mil. Settlement with Century Indemnity
------------------------------------------------------------------
Congoleum Corporation reached a settlement agreement with Century
Indemnity Company and its affiliates, another of its excess
insurance carriers over coverage for asbestos-related claims.  
Subject to various requirements set forth in the settlement
agreement, Century will pay $16.95 million to the Plan Trust.
A motion for Bankruptcy Court approval of this settlement is
pending.

"We believe this settlement is a major step forward," Roger S.
Marcus, Chairman of the Board, commented.  "Given the very active
role Century has played in opposing our reorganization efforts and
litigating coverage issues, we are quite pleased to have resolved
our differences.  We are also pleased that the Asbestos Claimants
Committee and the Future Claimants' Representative are supporting
this settlement.  We have now reached over $207 million in
insurance settlements, and negotiations will continue with other
carriers.  The disclosure statement hearing for our recently filed
reorganization plan is scheduled for Sept. 21, 2006, and a
positive result there could further add to the momentum of
settlements.  We remain hopeful that we can see our plan confirmed
in the first quarter 2007."

                    About Congoleum Corporation

Based in Mercerville, New Jersey, Congoleum Corporation (AMEX:CGM)
-- http://www.congoleum.com/-- manufactures and sells resilient
sheet and tile floor covering products with a wide variety of
product features, designs and colors.  The Company filed for
chapter 11 protection on Dec. 31, 2003 (Bankr. N.J. Case No.
03-51524) as a means to resolve claims asserted against it related
to the use of asbestos in its products decades ago.

Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A.
Brennanat, Esq., at Pillsbury Winthrop Shaw Pittman LLP represent
the Debtors in their restructuring efforts.  Elihu Insulbuch,
Esq., at Caplin & Drysdale, Chartered, represents the Asbestos
Claimants' Committee.  R. Scott Williams serves as the Futures
Representative, and is represented by lawyers at Orrick,
Herrington & Sutcliffe LLP, and Ravin Greenberg PC.  Michael S.
Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the
Official Committee of Unsecured Bondholders.  When Congoleum filed
for protection from its creditors, it listed $187,126,000 in total
assets and $205,940,000 in total debts.

At March 31, 2006. Congoleum Corporation's balance sheet showed
a $44,694,000 stockholders' deficit compared to a $44,960,000
deficit at Dec. 31, 2005.  Congoleum is a 55% owned subsidiary of
American Biltrite Inc. (AMEX: ABL).


CONSOLIDATED CONTAINER: Unit Remains Main Supplier of Dean Dairy
----------------------------------------------------------------
Consolidated Container Company LLC's wholly-owned subsidiary,
Consolidated Container Company LP, entered into a Purchase
Agreement with Dean Dairy Holdings, LLC, and Suiza Dairy Group,
LLC.

The terms of the Purchase Agreement are effective from July 1,
2006 through Dec. 31, 2011.  The Purchase Agreement replaces two
previous purchase agreements that expired on July 2, 2006.  Under
the terms of the Purchase Agreement, CCC will remain Dean's
primary outside supplier of plastic containers while gaining the
opportunity to enhance its current supply position with Dean.

Headquartered in Atlanta, Georgia, Consolidated Container Company
LLC -- http://www.cccllc.com/-- which was created in 1999,  
develops, manufactures and markets rigid plastic containers for
many of the largest branded consumer products and beverage
companies in the world.  CCC has long-term customer relationships
with many blue-chip companies including Dean Foods, DS Waters of
America, The Kroger Company, Nestle Waters North America, National
Dairy Holdings, The Procter & Gamble Company, Coca-Cola North
America, Quaker Oats, Scotts and Colgate-Palmolive.  CCC serves
its customers with a wide range of manufacturing capabilities and
services through a nationwide network of 61 strategically located
manufacturing facilities and a research, development and
engineering center.  Additionally, the company has 4 international
manufacturing facilities in Canada, Mexico and Puerto Rico.

Consolidated Container Company LLC's March 31, 2006, balance sheet
showed $685.4 million in total assets and $769.9 million in total
liabilities, resulting in a $84.5 million equity deficit.


COOPER-STANDARD: Ford's Production Cuts Cue S&P's Negative Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed Cooper-Standard
Automotive Inc.'s rating on CreditWatch with negative
implications.  The CreditWatch placements reflect Standard &
Poor's decision to review the company's rating in light of Ford
Motor Co.'s announcement that it will sharply lower its North
American production in the second half of 2006, with the largest
cuts coming in the fourth quarter.

Ford's production of light trucks in the fourth quarter will be
down 155,000 units, or 28%, versus fourth-quarter 2005 production.
These cuts will adversely affect on several fronts those suppliers
with substantial Ford exposure.

Fourth-quarter cash flow and liquidity will likely be reduced from
previous expectations, perhaps significantly.  The magnitude of
the reduction in liquidity will depend on other calls on cash in
the quarter, availability under existing bank facilities, and any
mitigating actions, although such offsets within the quarter may
be limited.

The long-term effect on supplier ratings will depend on Ford's
ability to stem its market share losses, which will drive 2007
production levels.  Ford's very dramatic fourth-quarter production
cuts may turn out to be an alternative to lesser cuts extending
over several quarters into 2007.  But the negative effect on cash
flow and liquidity in the fourth quarter will increase challenges
for certain suppliers in 2007, regardless of whether more stable
production levels occur in 2007.

Standard & Poor's will assess the effect of Ford's announcement in
light of the other business challenges facing Cooper-Standard
Automotive Inc.  Standard & Poor's expects to conclude its reviews
within the next two months.

Rating Placed on Creditwatch With Negative Implication:

                                       To                From
                                       --                ----
Cooper-Standard Automotive Inc.:   B+/Watch Neg./--   B+/Stable/--


DANA CORP: Creditors Balk at Proposed Execs' Compensation Scheme
----------------------------------------------------------------
Certain creditors of Dana Corporation assert that Dana and its
debtor-affiliates ignored the requirements of Section 503(c) of
the Bankruptcy Code with respect to the proposed executive
compensation scheme for Michael J. Burns and the five key
executives of Mr. Burns' core management team:

   1. The Ad Hoc Committee of Noteholders of the 6.5% Notes due
      2008, the 6.5% Notes due 2009, the 10.125% Notes due 2010,
      the 9.0% Notes due 2011, the 5.58% Notes due 2015, the 7.0%
      Notes due 2028 and the 7.0% Notes due 2029;

   2. The Official Committee of Unsecured Creditors;

   3. The International Union, United Automobile, Aerospace and
      Agricultural Implement Workers of America, and the United
      Steel, Paper and Forestry, Rubber, Manufacturing, Energy,
      Allied Industrial and Service Workers International Union;
      and

   4. The Official Committee of Equity Security Holders.

The Committees and Unions complain that the proposed Executive
Compensation Scheme does not provide specific information with
respect to the total amounts payable under the payment scheme,
and that the compensation was not summarized in total dollar
amounts.

The Committees and Unions argue that rewarding management for
simply maintaining the status quo is unacceptable given that:

   -- the Debtors' performance has substantially lagged behind
      their industry peers; and

   -- by the Debtors' own admission, they must fix their U.S.
      operations to successfully emerge from Chapter 11.

The Ad Hoc Committee, representing holders of more than 62.62% of
the $1,578,000,000 aggregate principal in the Debtors' Chapter 11
cases, points out that certain issues remained unanswered in the
Debtors' Compensation Motion:

   (a) Other benefit and compensation plans in place;

   (b) The Debtors' Total Enterprise Value targets do not
       incentivize management to improve performance and the
       Debtors' method of calculating TEV does not properly take
       into account the Debtors' fiduciary duty to creditors;

   (c) The terms of the Annual Incentive Plan submitted to the
       Securities and Exchange Commission on March 6, 2006;

   (d) Why the Senior Employees Retention Program entitlement is
       being assumed, as opposed to being treated as a general
       unsecured claim;

   (e) The definitions of "Cause" and "Good Reason" are decidedly
       pro-Executive;

   (f) The Debtors fail to establish that Mr. Burns is entitled
       to the conversion of the equity component of his
       prepetition compensation package to cash in the absence of
       a plan of reorganization, or that the proposals made in
       the Supplement strike an appropriate balance; and

   (g) The Debtors fail to establish the need to pay additional
       incentives in the first instance.

The Unions point out that the new target measurement based on TEV
could create perverse consequences that the Executives' rewards
will be linked to cuts in retiree health benefits.

The Unions assert that locking in a generous bonus and severance
program for top executives where at the same time, unionized
workers and retirees face great uncertainty complicates the
prospects for negotiated solutions with the Unions.

The Creditors Committee asserts that the Court should not approve
Mr. Burns' employment agreement at this time without a waiver
indicating that Mr. Burns will not assert any of his rights
during or after the Debtors' Chapter 11 cases in connection with
his prepetition change of control agreement.

The Creditors Committee avers that the definitions of
"Termination Without Cause" and "Good Reason" in the proposed
Compensation Scheme are too narrow.

The Equity Committee, on the other hand, does not oppose to
paying larger Completion Bonuses to the Executives for achieving
high performance levels.  As long as the Executives are provided
with appropriate incentives to enhance value, the Executives
deserve and should be well compensated, the Equity Committee
notes.

The Equity Committee proposes that at a TEV of $2,600,000,000 on
the effective date, the Executives would be entitled to 25% of
the $10,520,000 Target Completion Bonus pool.  The Equity
Committee further proposes that if the Debtors' TEV on the
effective date is higher than $2,600,000,000, then the
Executives' Bonus Pool will be expanded by 3% of the incremental
value over $2,600,000,000, without a cap.

Accordingly, the Committees and Unions ask the U.S. Bankruptcy
Court for the Southern District of New York to deny the
Executive Compensation Scheme.

                        Three Retirees Respond

In separate letters to the Court, Bob Osborne, David Kubicki and
Richard Forde contends that the Executives should not be entitled
to enormous amounts of salaries and benefits when they were
responsible for the Debtors' bankruptcy.

Messrs. Osborne, Kubicki and Forde are retirees and stockholders
of Dana.

The Retirees argue that it is unfair for small stockholders to
reward those responsible for taking the company into bankruptcy.  
It is unfair for the Executives to receive similar compensation
regardless of the outcome of the Debtors' bankruptcy proceedings,
the Retirees say.

According to Mr. Forde, the Debtors are paying AlixPartners, LLC,
a ton of money to do the job for which Mr. Burns was hired.

Mr. Forde says that shareholders have seen their investment
evaporate and many retirees have seen a significant piece of
their retirement planning financial base disintegrate.

                      About Dana Corporation

Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and  
manufactures products for every major vehicle producer in the
world, and supplies drivetrain, chassis, structural, and engine
technologies to those companies.  Dana employs 46,000 people in 28
countries.  Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually.  The
company and its affiliates filed for chapter 11 protection on Mar.
3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354).  Corinne Ball, Esq.,
and Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors.  Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker.  Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer.  Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel LLP, represents the Official Committee of
Unsecured Creditors.  When the Debtors filed for protection from
their creditors, they listed $7.9 billion in assets and $6.8
billion in liabilities as of Sept. 30, 2005.  (Dana Corporation
Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

The Debtors' consolidated balance sheet at March 31, 2006, showed
a $456,000,000 total shareholder' equity resulting from total
assets of $7,788,000,000 and total liabilities of $7,332,000,000.


DANA CORP: SEIU Fund, et al. File Lawsuit Against Dana Execs
------------------------------------------------------------
SEIU Pension Plans Master Trust, The West Virginia Laborer's
Pension Trust Fund, and The Plumbers and Pipefitters National
Pension Fund, on behalf of shareholders who purchased Dana
Corporation's publicly traded securities between April 21, 2004,
and Oct. 7, 2005, have brought a lawsuit before the United
States District Court for the Northern District of Ohio, Western
Division against:

   1. Michael Burns, Dana's chief executive officer, and
   2. Robert Richter, Dana's chief financial officer.

Lerach Coughlin Stoia Geller Rudman & Robbins, LLP, represents
the Pension Funds.

The Pension Funds allege that Messrs. Burns and Richter caused
Dana to issue false financial statements during 2004 and 2005.  
According to the Pension Funds, during the Class Period, the
Executives caused Dana to issue press releases and to file
quarterly and annual reports with the Securities and Exchange
Commission, which misrepresented the profitability of Dana's
operations and the adequacy of Dana's internal controls.

Darren J. Robbins, Esq., at Lerach Coughlin Stoia Geller Rudman &
Robbins, LLP, in San Diego, California, asserts that the
Executives caused Dana to use a variety of accounting
manipulations to falsify the company's financial results during
the Class Period, including:

   -- improperly recognizing revenue;

   -- improperly valuing inventory; and

   -- failing to properly account for expenses related to asset
      sales, executive bonuses and increased steel costs.

Specifically, according to Mr. Robbins, Messrs. Burns and
Richter:

   -- caused Dana to report gross margin, earnings per share and
      net income numbers that were overstated by as much as 70%;

   -- knew but failed to disclose that their decision to transfer
      certain U.S. operations to plants in Europe was causing
      Dana to incur millions of dollars in unaccounted for
      shipping costs;

   -- entered into secret "price agreements" with Dana customers,
      including Kenworth, Navistar, Peterbilt, PACCAR, Ford, GMC
      and Chrysler, which were not properly included on Dana's
      financial statements;

   -- provided artificially inflated EPS forecasts that they knew
      were not attainable; and

   -- assured investors that they had conducted thorough
      evaluation of the effectiveness of the company's
      "disclosure controls and procedures".

The Executives purposefully kept investors in the dark concerning
Dana's actual operating performance, Mr. Robbins says, in order
to:

   (i) avoid having to write down millions of dollars of the
       company's deferred tax assets;

  (ii) generate upward movement in Dana's stock price;

(iii) induce the rating agencies to upgrade Dana's credit
       rating;

  (iv) induce key employees to remain with the company;

   (v) meet the net income amounts forecasted by defendants in
       order to trigger defendants' bonus-related compensation;

  (vi) permit the company to raise $450,000,000 from the sale of
       debt securities; and

(vii) avoid Board liability for having rejected an $18 per share
       offer made by Arvin Meritor in late 2003.

The truth about Dana's actual operating performance began to
reach the market by September 2005 and as a result, the price of
Dana's securities dropped precipitously.  Thereafter, the
Defendants were compelled to admit that Dana's results for fiscal
year 2004 and the first quarter and second quarter of 2005 had
been falsified, Mr. Robbins notes.  The Defendants have further
admitted that quarterly net income reported by Dana during the
Class Period was overstated by as much as 70% and that Dana's
assets were overstated by as much as $1,000,000,000.

The Pension Funds argue the Executives violated the Securities
Exchange Act of 1934 by virtue of the accounting manipulations
and the secret agreements with vendors.

As a direct and proximate result of the Executives' wrongful
conduct, the Plaintiffs and the other members of the Class
suffered damages in connection with their purchases of Dana
securities during the Class Period, Mr. Robbins avers.

In February 2006, the SEC commenced formal investigation into
Dana's accounting practices.

                    Class Action Allegations

During the Class Period, Dana had more than 149,000,000 shares of
stock outstanding, and more than $450,000,000 of debt
outstanding.

Mr. Robbins contends that the members of the Class are so
numerous that joinder of all members is impracticable.  "The
disposition of their claims in a class action will provide
substantial benefits to the parties and the Court."  Moreover,
common questions of law and fact affect the members of the Class,
Mr. Robbins adds.

Accordingly, the Pension Funds ask the Ohio Court to:

   (a) determine that their action is a proper class action and
       certify them as class representatives under Rule 23 of the
       Federal Rules of Civil Procedure;

   (b) award compensatory damages in favor of the Plaintiffs and
       the other Class members against all Defendants in an
       amount to be proven at trial; and

   (c) award them and the Class their reasonable costs and
       expenses incurred in the class action, including counsel
       fees and expert fees.

A full-text copy of the SEIU Pension Complaint is available for
free at http://researcharchives.com/t/s?1036

                      About Dana Corporation

Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and  
manufactures products for every major vehicle producer in the
world, and supplies drivetrain, chassis, structural, and engine
technologies to those companies.  Dana employs 46,000 people in 28
countries.  Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually.  The
company and its affiliates filed for chapter 11 protection on Mar.
3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354).  Corinne Ball, Esq.,
and Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors.  Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker.  Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer.  Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel LLP, represents the Official Committee of
Unsecured Creditors.  When the Debtors filed for protection from
their creditors, they listed $7.9 billion in assets and $6.8
billion in liabilities as of Sept. 30, 2005.  (Dana Corporation
Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

The Debtors' consolidated balance sheet at March 31, 2006, showed
a $456,000,000 total shareholder' equity resulting from total
assets of $7,788,000,000 and total liabilities of $7,332,000,000.


DELPHI CORP: Ad Hoc Equity Panel Members Hold 20% Stake
-------------------------------------------------------
Appaloosa Management L.P., Wexford Capital LLC, Lampe Conway &
Co., LLC, Harbinger Capital Partners LLC, and Marathon Asset
Management LLC comprise the Ad Hoc Equity Committee of Delphi
Corporation.

In the aggregate, Appaloosa, Wexford, Lampe, Harbinger and
Marathon hold beneficial ownership of approximately 20% of
Delphi's issued and outstanding common shares:

     Member             Delphi Shares Held    Percent Stake
     ------             ------------------    -------------
     Appaloosa              52,000,000             9.3%
     Harbinger              26,450,000             4.7%
     Wexford                18,114,412             3.2%
     Marathon                9,834,298             1.8%
     Lampe                   5,348,700             1.0%

As of July 31, 2006, there were 561,781,590 outstanding shares of
Delphi's $0.01 par value common stock.

Harbinger initially held 32,025,000 shares but failed to follow
the procedures in line with becoming a "substantial equityholder"  
in Delphi.  Thus, the Court directed Harbinger to sell some of its
stock so that it owns less than 26,499,999 shares, which is the
number of shares for an entity to become a substantial
equityholder.

The Ad Hoc Committee members assert claims against the Debtors
arising on account of their beneficial ownership of Delphi's
issued and outstanding common shares.

Appaloosa acquired shares in Delphi on Oct. 10 and 11, 2005.  
Harbinger bought Delphi shares at various times between March and
June 2006.  Wexford bought shares between Sept. 30, 2005, and
Dec. 2, 2005.

Marathon acquired Delphi shares at various times between September
2005 and March 2006.  Lampe bought shares at various times between
April 2005 and April 2006.

Appaloosa is headquartered at 26 Main Street, Chatham, New Jersey
07928.  Wexford has a business address of 411 West Putnam Avenue,
Greenwich, Connecticut 06830.  Its unit, Wexford Spectrum Trading
Ltd., is headquartered at Walker House, Mary Street, Georgetown,
Grand Cayman, Cayman Islands.

Harbinger has a business address of 555 Madison Avenue, 16th
Floor, New York, New York 10022.  Marathon has a business address
of 461 Fifth Ave., 10th Floor, New York, NY 10017.  Lampe is
headquartered at 680 Fifth Avenue, 12th Floor, New York, New York
10019.

Appaloosa, Wexford, Harbinger and Marathon also hold individual
claims that, in the aggregate, exceed $285,430,000 on account of
their ownership of debt securities issued by the Debtors.

Frank L. Eaton, Esq., at White & Case LLP, represents the Ad Hoc
Committee in the Debtors' cases.

In a Verified Statement filed with the Court pursuant to Rule 2019
of the Federal Rules of Bankruptcy Procedure, Mr. Eaton ascertains
that his firm does not hold any claim against or equity interest
in the Debtors.  However, White & Case may at some future time
seek to have its fees and expenses reimbursed by the Debtors'
estates.

Mr. Eaton also discloses that his firm was retained by Pardus
Capital Management L.P. and certain of its affiliates on
May 1, 2006.

Pardus owns 4.7%, or 26,400,000 shares, of Delphi's issued and
outstanding common shares.  Upon Pardus' appointment to the
Official Committee of Equity Security Holders, Pardus released
White & Case as its counsel.

Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/  
-- is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology.  The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide.  The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts.  (Delphi Bankruptcy News, Issue No. 38; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or   
215/945-7000)


DELPHI CORP: Court Approves Information Sharing with Equity Panel
-----------------------------------------------------------------
The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for
the Southern District of New York, in the absence of Judge Robert
D. Drain, signed on Aug. 3, 2006, a stipulation and agreed order
authorizing the Official Committee of Unsecured Creditors to
provide copies of a redacted complaint against General Motors
Corporation and certain former Delphi Corp. officers, to the
Official Committee of Equity Security Holders appointed in the
Debtors' Chapter 11 cases and the Ad Hoc Committee of Equity
Security Holders.

The Redacted Complaint is stripped of all confidential information
subject to a Joint Interest Agreement between the Debtors and the
Creditors Committee.

Judge Robert E. Gerber, on behalf of Judge Drain, also put his of
approval on another stipulation among the Debtors, the Creditors
Committee, and certain parties on the terms and conditions of an
order authorizing the Creditors Committee to file, under seal,
exhibits to the GM Complaint.

The parties-in-interest are:

   * the United Steel, Paper and Forestry, Rubber,
     Manufacturing, Energy, Allied Industrial and Service
     Workers, International Union (USW), AFL-CIO;

   * the International Union of Operating Engineers Locals 18 S,
     832 S and 101;

   * the International Brotherhood of Electrical Workers Local
     663; and

   * the International Association of Machinists and Aerospace
     Workers District 10.

The Committee will promptly provide copies of the Redacted
Complaint to counsel of USW, et al.

USW, et al., will use the Redacted Complaint solely in connection
with the Prosecution Motion, subject to provisions of the Seal
Order.  However, nothing will limit any and all of the Creditors
Committee's or the Debtors' objections regarding further requested
use or admissibility of the Redacted Complaint.

USW, et al., reserve the right to seek leave from the Court to
obtain some or all the information redacted from the Complaint.
Nothing will constitute agreement by the Creditors Committee or
the Debtors that USW, et al., have any standing to appear in the
Prosecution Motion.

Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/  
-- is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology.  The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide.  The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts.  (Delphi Bankruptcy News, Issue No. 38; Bankruptcy
Creditors' Service, Inc.,  http://bankrupt.com/newsstand/or   
215/945-7000)


DIAMONDHEAD CASINO: Losses Continue in Absence of Operations
------------------------------------------------------------
Diamondhead Casino Corp. has no operations, generates no revenues,
and, incurred a loss applicable to common shareholders of
$1,172,719 for the second quarter ended June 30, 2006, the Company
disclosed in a Form 10-QSB filing delivered to the Securities and
Exchange Commission on Aug. 11, 2006.

As of June 30, 2006, the Company's balance sheet showed $6,300,566
in assets and $6,108,094 in equity.

Friedman LLP, the Company's auditor, expressed substantial doubt
about the Company's ability to continue as a going concern after
auditing the Company's financial statements for the year ending
Dec. 31, 2005.  The auditor pointed to the Company's significant
recurring net losses over the past few years.  In addition, the
Company has discontinued all significant operations, except for
its efforts to develop the Diamondhead, Mississippi property.  
According to the auditor, those efforts may not contribute to the
Company's cash flows in the foreseeable future.  

A full-text copy of the regulatory filing is available for free at
http://ResearchArchives.com/t/s?103e

Headquartered in Madeira Beach, Florida, Diamondhead Casino
Corporation develops a casino resort in Diamondhead, Mississippi.
This resort would include a luxury hotel and spa, a sports and
entertainment center, a casino space, a recreational vehicle park,
and a business conference center.  The company owns approximately
404.5 acres of unimproved land in Diamondhead for developing the
resort.  Diamondhead Casino was founded by Charles S. Liberis.
The company, formerly known as Europa Cruises Corporation, was
incorporated in 1988.  It changed its name to Diamondhead Casino
Corporation in 2002.


DIRECTED ELECTRONICS: Acquires Polk Audio for $136 Million
----------------------------------------------------------
Directed Electronics, Inc., entered into a definitive agreement to
acquire Polk Audio Inc. for a consideration of $136 million.

The Company disclosed that, current Polk management will join the
Company's team after the acquisition, scheduled to close during
the third quarter of 2006.  Polk co-founders Matthew Polk and
George Klopfer will remain actively engaged after the transaction
by using their 35 years of industry experience to advise on the
direction of the Company's home audio strategy.

"The acquisition of Polk, with its leading consumer brand,
complements our current Definitive Technology product line," Jim
Minarik, president and chief executive officer, commented.  
"Having these two powerful brands under the Directed umbrella will
give us the #1 position in the U.S. home speaker market according
to industry data."

The Company also disclosed that, including Polk Audio's
approximately $86 million in net sales for the twelve months ended
June 30, 2006, the Company's net sales would have been
approximately $435 million for the same period.

"We have worked hard to build Polk into a profitable leader in
home and mobile audio," Jim Herd, president of Polk Audio, said.  
"We believe the Polk brand is positioned for continued growth
through our existing customer base, as well as through the
introduction of innovative entertainment products for both the
home and vehicle environments.  We look forward to partnering with
Directed to build our business together."

Goldman, Sachs & Co. and Trivest Partners acted as financial
advisors and Greenberg Traurig, LLP acted as legal advisor to the
Company.  Barrington Associates acted as the exclusive financial
advisor and DLA Piper US LLP acted as legal advisor to Polk Audio.

The acquisition will be financed by an addition to the Company's
senior credit facility.  CIBC World Markets and J.P. Morgan
Securities are providing committed financing for the acquisition
and related expenses.

                        About Polk Audio

Polk Audio Inc. was founded in 1972 and has grown into a speaker
brand in home entertainment.  The company sells its products in
all key channels of home electronics distribution including a
diverse set of customers such as Circuit City, Tweeter, Fry's
Electronics, Crutchfield, and AVAD Distributors.  Polk's focus on
brand management and product development has resulted in a track
record of growth in both home and mobile audio.

                   About Directed Electronics

Headquartered in Vista, California, Directed Electronics
(Nasdaq: DEIX) -- http://www.directed.com/-- is a designer and  
marketer of consumer branded vehicle security and convenience
systems and a supplier of home audio, mobile audio and video, and
satellite radio products. Directed offers a broad range of
products, including security, remote start, hybrid systems, GPS
tracking and navigation, and accessories, which are sold under its
Viper(R), Clifford(R), Python(R), and other brand names.  In the
home audio market, Directed designs and markets Definitive
Technology(R) and a/d/s/(R) premium loudspeakers.  Directed's
mobile audio products include speakers, subwoofers, and amplifiers
sold under its Orion(R), Precision Power(R), Directed Audio(R),
a/d/s/(R), and Xtreme(R) brand names. Directed also markets a
variety of mobile video systems under the Directed Video(R),
Directed Mobile Media(R) and Automate(R) brand names.  Directed
also markets and sells certain SIRIUS-branded satellite radio
products, with exclusive distribution rights for such products to
Directed's existing U.S. retailer customer base.

                         *     *     *

As reported in the Troubled Comapny Reporter on Feb. 14, 2006
Standard & Poor's Ratings Services raised its corporate credit
rating on Directed Electronics Inc. to 'BB-' from 'B+' and removed
the ratings from CreditWatch with positive implications, where
they were placed on Nov. 29, 2005.  

At the same time, Standard & Poor's raised its rating on DEI's
senior secured credit facility to 'BB-' from 'B+'.  The '3'
recovery rating assigned to the senior secured facility was
affirmed.  The rating outlook is stable.


DOMTAR INC: Inks $1.35 Billion Merger Deal with Weyerhaeuser
------------------------------------------------------------
Domtar Inc. signed a definitive agreement to combine with
Weyerhaeuser Co.'s (NYSE: WY) fine paper business and related
assets in a $1.35 billion transaction.  The new company, to be
called Domtar, will have its head office in Montreal, Quebec,
while the headquarters of operations will be in Fort Mill, South
Carolina.  The transaction has been approved by the Boards of
Directors of both companies.

"With this transaction, we are transforming Domtar into one of the
world's leading paper companies, presenting shareholders with new
opportunities and creating a stronger company for employees and
customers," said Raymond Royer, Domtar's President and Chief
Executive Officer, who will lead the new company in the same
capacity.  "We are proactively enhancing the quality of our asset
mix and taking decisive action to assure our future in a
consolidating industry.  In addition to more than doubling
Domtar's current paper production capacity, this compelling
strategic and operational fit will make the new company
financially stronger with prominent brands, a lower cost base and
the necessary scale and scope to succeed in the highly competitive
global marketplace."

Based on annualized Q2 2006 unaudited results for Domtar and for
Weyerhaeuser's fine paper business, Domtar estimates the new
company would generate $6.5 billion in sales and $730 million in
EBITDA, before synergies.  The new company will have an enterprise
value exceeding $6 billion.

                        The "New Domtar"

The backbone of the new company will be six highly efficient
world-class uncoated freesheet mills that will provide two-thirds
of its more than five million tons of capacity.  These mills,
combined with a solid mix of specialty facilities, will make the
new company one of the most efficient and cost-competitive paper
companies in North America.  The company will have an expanded
North American reach and a wide range of well-known business and
commercial printing paper brands.  With greater access to volume,
increased depth of product offerings, and better service through a
wider geographic footprint, the company will be in a position to
meet the needs of large and small customers alike throughout
Canada and the United States.  It will maintain the environmental
leadership shown by both Domtar and Weyerhaeuser, notably through
added capacity to expand its environmentally and socially
responsible papers such as the EarthChoice(R) product line.

                         Leadership Team

Mr. Royer, as President and CEO, will lead an organization of
nearly 14,000 employees with a management team composed of
executives from Domtar and Weyerhaeuser paper operations.  This
team includes Marvin Cooper, currently Weyerhaeuser's Senior Vice-
President, Cellulose Fiber & White Paper, Containerboard
Manufacturing and Engineering, who will become Chief Operating
Officer of the new company.  Domtar's current Senior Vice-
President and Chief Financial Officer, Daniel Buron, will be the
Chief Financial Officer.

Harold MacKay, counsel and former chairman and senior partner at
the Regina, Canada-based law firm of MacPherson Leslie and Tyerman
LLP, and an international advisor to Weyerhaeuser's Board of
Directors, will become non-executive Chairman of the new company's
13-member Board of Directors -- seven of whom will be nominated by
Weyerhaeuser and six by Domtar.  Mr. MacKay will resign his
Weyerhaeuser advisory role before becoming Chairman of the "new
Domtar."

                            Synergies

It is anticipated that the new company will achieve $200 million
in annualized synergies within two years, created by a combination
of process optimization resulting in lower operating costs,
reductions in transportation, logistics and purchasing costs,
implementation of best-in-class business practices and sales and
administrative cost reductions.  The cost to implement these
synergies is anticipated to be $100 million.

                      Transaction Structure

Under the terms of the transaction, which is structured as a
"Reverse Morris Trust," Weyerhaeuser's fine paper business,
consisting of 10 primary pulp and paper mills (seven in the United
States and three in Canada), converting, forming and warehousing
facilities and two sawmills will be transferred into a newly
formed company for stock and a cash payment of $1.35 billion to be
provided by the new company through borrowings under a credit
facility.  Weyerhaeuser will distribute the shares of the new
company to its shareholders in either a spin-off or split-off
transaction at its own discretion.  Domtar will combine with the
newly formed company to create the "new Domtar."

The combination will take place under a Plan of Arrangement.  

Under the Plan of Arrangement:

   1. All shares of Domtar will be automatically exchanged -- on a
      one-for-one basis -- for common shares of a Canadian
      subsidiary of the "new Domtar."

   2. Following that, Domtar shareholders who are taxable Canadian
      residents can either exchange these shares for common shares
      in the "new Domtar" (which will be traded on the New York
      Stock Exchange and on the Toronto Stock Exchange) or they
      can receive the "new Domtar" Canadian subsidiary
      exchangeable shares (which will be traded on the Toronto
      Stock Exchange).  The exchangeable shares are the economic
      equivalent of the common shares of the "new Domtar," with
      equal dividend entitlement and voting rights at the level of
      the "new Domtar."  The exchangeable shares are exchangeable
      at any time at the option of the holder into the "new
      Domtar" common shares on a one-for-one basis.

   3. For taxable Canadian residents who choose the exchangeable
      shares, the transaction will be tax deferred.  However, if
      they select to receive shares directly in the "new Domtar,"
      the transaction is taxable.

   4. Non-Canadian residents who are Domtar shareholders will
      automatically receive common shares in the "new Domtar" and
      for them the transaction will be taxable.

   5. The transaction is expected to be tax deferred to all U.S.
      holders of Weyerhaeuser shares.

At the time of the closing, the combined company will be owned
approximately 55% by former Weyerhaeuser shareholders and 45% by
former Domtar shareholders.

The combination is subject to approvals by the shareholders of
Domtar by a special resolution, the Superior Court of Quebec,
appropriate regulatory and other authorities, as well as customary
closing conditions.  The transaction is expected to close in the
first quarter of 2007.  Domtar and Weyerhaeuser will continue to
operate separately until the transaction closes.

Applications will be made to list the shares of the "new Domtar"
on the New York Stock Exchange and on the Toronto Stock Exchange,
and the exchangeable shares on the Toronto Stock Exchange.

In due course, information relating to this transaction, including
Domtar's Management Proxy Circular in connection with the
anticipated Special Meeting of Domtar shareholders to be convened
to consider the transaction, will be prepared and distributed to
holders of Domtar's common and preferred shares.  

Domtar's financial advisors in this transaction are J.P. Morgan
Securities Inc. and RBC Dominion Securities Inc., and its legal
advisers are Debevoise & Plimpton LLP and Ogilvy Renault LLP.

                        About Domtar Inc.

Headquartered in Montreal, Quebec, Domtar Inc. (TSX/NYSE: DTC) --
http://www.domtar.com/-- produces uncoated freesheet paper in  
North America.  The Company also a manufactures business papers,
commercial printing and publication papers, and technical and
specialty papers.  Domtar manages according to internationally
recognized standards 18 million acres of forestland in Canada and
the United States, and produces lumber and other wood products.  
Domtar has 10,000 employees across North America.  The company
also has a 50% investment interest in Norampac Inc., a Canadian
producer of containerboard.

                          *     *     *

As reported in the Troubled Company Reporter on April 18, 2006,
Dominion Bond Rating Service downgraded the ratings on Domtar
Inc.'s Unsecured Notes and Debentures and Preferred Shares to BB
(low) from BB (high), and Pfd-5 (high) from Pfd-4, respectively.  
The trends have been changed to Stable from Negative.


ECOM ECOM.COM: Files Joint Plan of Reorganization in Florida
------------------------------------------------------------
The Joint Plan of Reorganization of eCom eCom.com, Inc., and
American Capital Holdings, Inc., was filed with the U.S.
Bankruptcy Court for the Southern District of Florida by Kluger,
Peretz, Kaplan & Berlin, the attorneys for eCom eCom.com, Inc.,
and Schiff-Hardin LLP, the attorneys for American Capital
Holdings, Inc.

The plan, which is subject to Bankruptcy Court approval, calls for
the issuance of 31,593,064 Common Shares to the Creditors listed
in Exhibit "A" of the Plan.  It is the intent of American Capital
Holdings, Inc., if the Plan of Reorganization is confirmed by the
Court, to distribute the 23,280,381 common shares as a dividend to
American Capital Holdings, Inc.'s shareholders.  The proposed date
of record for this proposed stock dividend, which is subject to
Bankruptcy Court approval, will be five business days subsequent
to the Plan of Reorganization's confirmation by the Bankruptcy
Court.

A full-text copy of the Joint Plan of Reorganization is available
for free at http://ResearchArchives.com/t/s?1052

                     Distribution of Shares

In other matters, the National Association of Securities Dealers,
declared Aug. 8, 2006, the ex-dividend date for the distribution
of shares of American Capital Holdings, Inc. to the shareholders
of eCom eCom.com, Inc.  The dividend of .05 of a share of American
Capital Holdings, Inc. for each share of eCom owned on Jan. 5,
2004, the record date.  These shares were distributed on Aug. 7,
2006.

                      About American Capital

Based in Palm Beach Gardens, Florida, American Capital Holdings --
http://www.americancapitalholding.com/-- is a business with  
operations in insurance, energy and the environment.

                       About eCom eCom.com

Based in Palm Beach Gardens, Florida, eCom eCom.com, Inc. (Pink
Sheets:ECEC) -- http://www.ecomecom.net/-- develops e-commerce  
infrastructure that enables the small business enterprise to carve
its niche in the retail and business to business Internet economy.  
eCom eCom gave birth to B2Bplus, SuperHUB, and USA Performance
Products.  Continuing to expand, divesting and diversifying, eCom
eCom has ventured into compression software.

Creditors of the Company filed an involuntary chapter 11 petition
on Nov. 29. 2004 (Bankr. S.D. Fla. Case No. 04-34535).  The law
firm of Kluger, Peretz, Kaplan & Berlin, P.L., in Miami, Florida,
represents the Debtor.


EMISPHERE TECH: Accumulated Deficit Tops $381.2 Mil. at June 30
---------------------------------------------------------------
Emisphere Technologies, Inc., incurred a $3.7 million net loss on
$5.2 million of net revenues for the three months ended June 30,
2006, compared to a $5.8 million net loss on $1.9 million of net
revenues in 2005, the company disclosed its second quarter
financial results to the Securities and Exchange Commission.

As of June 30, 2006, the Company's accumulated deficit widened to
$381.2 million from $350.6 million at Dec. 31, 2005.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?fc2

                       Going Concern Doubt

PricewaterhouseCoopers LLP raised substantial doubt about
Emisphere Technologies, Inc.'s ability to continue as a going
concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005.  The auditing firm
pointed to the Company's operating losses, limited capital
resources and significant future commitments.

Headquartered in Tarrytown, New York, Emisphere Technologies, Inc.
-- http://www.emisphere.com/-- is a biopharmaceutical company  
charting new frontiers in drug delivery.  The Company develops
oral forms of injectable drugs, either alone or with corporate
partners, by applying its proprietary eligen(R) technology to
these drugs.


EMMIS COMMUNICATIONS: S&P Holds B+ Rating on Negative Watch
-----------------------------------------------------------
Standard & Poor's Ratings Services' ratings on Emmis
Communications Corp., including the 'B+' corporate credit rating,
remained on CreditWatch with negative implications, where they
were placed on May 11, 2005.  Indianapolis, Indiana-based Emmis
had roughly $658 million of debt outstanding as of May 31, 2006.

"The CreditWatch listing reflects considerable uncertainty
surrounding proposals to take the company private and the impact
this would have on Emmis' capital structure," said Standard &
Poor's credit analyst Michael Altberg.

Following a debt-financed share buyback of approximately $400
million, the company's total debt to EBITDA ratio increased to
nearly 8x as of Nov. 30, 2005.  Although the company has attempted
to de-leverage over the past two quarters, any debt-financed
buyout scenario would raise leverage further.

In resolving the CreditWatch listing, Standard & Poor's will
review the new capital structure, assuming that a buyout is
pursued, and assess management's business strategies after the
buyout.  In connection with its review, Standard & Poor's will
determine the extent to which recent asset sales will mitigate
debt incurred in a possible buyout.


ENER1 INC: Amends Year 2005 Financial Statements Due to Errors
--------------------------------------------------------------
Ener1, Inc., filed a second amendment to its annual report for the
year ended Dec. 31, 2005, with the Securities and Exchange
Commission to:

    a) reflect the corrected accounting for and valuation of
       additional compound embedded derivatives in Ener1's senior
       secured convertible debentures issued in January 2004 and
       in March 2005;

    b) revise the valuation of the initial discount and interest
       accretion on the 2004 and 2005 Debentures resulting from
       the revaluation of the compound embedded derivatives;

    c) record the correct value of the warrants issued with the
       2004 Debentures;  
  
    d) record the value of Ener1's right to require Ener1 Group,
       Inc. to purchase shares of Series B Preferred Stock; and
    
    e) reflect the Series A Preferred Stock dividends payable to
       the minority interest owner as a reduction in minority
       interest income.

The company reported net income of $28,604,000 for the year ended
Dec. 31, 2005, an increase of $21,483,000, when compared to net
income of $7,121,000 for the year ended Dec. 31, 2004.  Net income
includes $70,849,000 and $46,727,000 in gain on derivative
liability resulting from non-cash changes in the accounting value
of derivative liabilities for the years ended Dec. 31, 2005 and
2004, respectively.

Ener1 generated $60,000 of net sales in 2005, compared to $42,000
of sales generated in the prior year.

The company's balance sheet at Dec. 31, 2005, showed $10,449,000
in total assets, $68,237 in total liabilities and $18,155,000 of
redeemable preferred stock, resulting in a stockholders' deficit
of $75,943,000.

At Dec. 31, 2005, the Company had a working capital deficit of
$55,627,000 primarily due to a derivative liability of
$54,979,000.  Working capital deficit excluding the derivative
liability was $648,000. Cash at Dec. 31, 2005 was $2,306,000.

A full-text copy of the Company's second amended annual report for
2005 is available for free at http://researcharchives.com/t/s?102e

                       Going Concern Doubt

Malone & Bailey, PC, expressed substantial doubt about Ener1's
ability to continue as a going concern after auditing the
Company's financial statements for the years ended Dec. 31, 2005  
and 2004.  The auditing firm pointed to the Company's recurring
losses from operations, negative cash flow and has accumulated
deficit.

                          About Ener1

Ener1 Inc. (OTCBB: ENEI) -- http://www.ener1.com/-- is an   
alternative energy technology company.  Its interests include:
EnerDel, a lithium-ion battery company in which Delphi Corp. owns
a minority interest, Japan-based Enerstruct, a lithium-ion company
in which Ener1 strategic investor ITOCHU Corporation has a major
interest; wholly owned subsidiary EnerFuel, a fuel cell products
and services company, and wholly owned subsidiary NanoEner, which
develops nanotechnology-based materials and manufacturing
processes for high-power batteries and other applications.


ENER1 INC: Posts $32 Million Net Loss in Quarter Ended June 30
--------------------------------------------------------------
Ener1 Inc. reported a net loss of $32,492,000 for the quarter
ended June 30, 2006, a decrease of $58,550,000 when compared to
net income of $26,058,000 for the quarter ended June 30, 2005.

The decrease is due primarily to:

     a) increased general and administrative expenses due to
        $9,200,000 of costs associated with the modification of
        the terms of certain warrants issued to Ener1 Group in
        exchange for Ener1 Group's agreement to exercise the
        warrants during the quarter; and

    b) decreased derivative gains and losses of $58,434,000 which
       resulted primarily from declines in the price of the
       Company's common stock, partially offset by a decrease
       research and development expense of approximately
       $13,302,000 due primarily to the expensing in fiscal 2005
       of:

           -- $10,500,000 for the value of equipment charged to
              research and development expense, and

           -- $1,000,000 of costs associated with a research and
              development contract with EnerStruct, Inc.

The Company no significant sales or gross margin from continuing
operations in either of the three or six month periods ended
June 30, 2006 and 2005.  Sales totaling $9,000 in the quarter
ending June 30, 2006 are for services provided by the Company's
fuel cell business.

At June 30, 2006, the Company's balance sheet showed $8,722,000 in
total assets, $31,208,000 in total liabilities and $20,719,000 of
redeemable convertible preferred stock, resulting in a
stockholders' deficit of $43,205,000.  At June 30, the Company had
a working capital deficit of $15,861,000 primarily due to
aggregate derivative liabilities of $10,765,000 and accounts
payable and accrued expenses of $6,154,000.

A full-text copy of the company's quarterly report is available
for free at http://researcharchives.com/t/s?1030

                       Funding Problems

In its quarterly report, Ener1 cautioned that it presently does
not have sufficient funds to execute its business plans, and needs
to raise $30,000,000 to $40,000,000 in additional capital to
conduct planned operations during 2006 and 2007, including planned
capital expenditures for pilot production equipment and facilities
upgrades at EnerDel and funding of continuing R&D expenses.

The Company is required, under the terms of its 2004 and 2005
debentures, to register the resale of the common stock underlying
the debentures and associated warrants.  These registration
statements have not been available for use since Nov. 21, 2004.

As a result of the restatement of Ener1's financial statements for
2004, 2005 and 2006 and the amendment of certain prior filings
with the SEC containing such financial information, the company
has not yet filed post-effective amendments to these registration
statements with updated financial statements.

Under the terms of the registration agreements for the 2004
debentures and 2005 debentures, the company has incurred
$2,173,000 as of June 30, 2006 of registration delay payment
requirements due to the debenture holders.

                  Satellite Asset Forbearance

On Aug. 9, 2006, Ener1 entered into a Forbearance Agreement with
Satellite Asset Management, L.P., a holder of its 2004 debentures
and 2005 debentures.

Satellite had delivered a letter dated Aug. 7, 2006, pursuant to
Section 6(d)(ii) of the 2004 Debentures and Section 6(e)(ii) of
the 2005 Debentures providing notice of a default under the 2004
and 2005 debentures as a result of the company's failure to make
certain payments to Satellite totaling $1,549,750 as of July 31,
2006.

Under the Forbearance Agreement, Satellite rescinded this notice
of default and agreed to forbear from any action for the
"Forbearance Period."

The "Forbearance Period" will remain in effect until Nov. 1, 2006,
unless a termination event occurs prior to Nov. 1, 2006.  A
"Termination Event" includes, among other things, a failure to
comply with the Interest Payment Deposit Agreement, the occurrence
of certain bankruptcy-related events, failure to become current on
reporting obligations under the Securities Exchange Act of 1933,
as amended, by Sept. 1, 2006.

                       Going Concern Doubt

Malone & Bailey, PC, expressed substantial doubt about Ener1's
ability to continue as a going concern after auditing the
Company's financial statements for the years ended Dec. 31, 2005  
and 2004.  The auditing firm pointed to the Company's recurring
losses from operations, negative cash flow and has accumulated
deficit.

                          About Ener1

Ener1 Inc. (OTCBB: ENEI) -- http://www.ener1.com/-- is an   
alternative energy technology company.  Its interests include:
EnerDel, a lithium-ion battery company in which Delphi Corp. owns
a minority interest, Japan-based Enerstruct, a lithium-ion company
in which Ener1 strategic investor ITOCHU Corporation has a major
interest; wholly owned subsidiary EnerFuel, a fuel cell products
and services company, and wholly owned subsidiary NanoEner, which
develops nanotechnology-based materials and manufacturing
processes for high-power batteries and other applications.


ENTERCOM COMMUNICATIONS: S&P Holds Low-B Ratings on Negative Watch
------------------------------------------------------------------
Standard & Poor's Ratings Services' 'BB' corporate credit rating
and 'B+' subordinated debt rating on Entercom Communications Corp.
remained on CreditWatch, where they were placed with negative
implications on June 2, 2006, reflecting concerns of increasing
leverage.

Bala Cynwyd, Pennsylvania-based Entercom is one of the five
largest radio broadcasters in the U.S., with $669 million of debt
outstanding as of June 30, 2006.

Entercom announced a definitive agreement to acquire radio
stations in four markets from CBS Corp. for a total of $262
million.  Also, the company announced a definitive agreement with
Radio One Inc. for the acquisition of an FM station in Boston for
$30 million.  Closing of these transactions is subject to
regulatory approval and the divestiture of several stations in the
Rochester, New York, market because of FCC ownership limitations.

"In resolving the CreditWatch listing, Standard & Poor's will
review the financing structure and assess the impact these
acquisitions will have on the company's business strategy and
financial profile," said Standard & Poor's credit analyst Heather
M. Goodchild.


ENTERCOM RADIO: Radio Station Buys Cue Moody's to Review Ratings
----------------------------------------------------------------
Moody's Investors Service placed Ba2 rating on Entercom Radio,
LLC's $150 million 7.625% senior subordinated notes and corporate
family Rating at Ba1 on review for possible downgrade following
the company's announcement to acquire fifteen radio stations in
four markets from CBS Corporation for $262 million in cash, a
Boston station from Radio One for $30 million in cash and the
divestiture of two Rochester stations.

The review will focus on the impact of the incremental debt
to finance the transactions and the resulting impact on credit
metrics, particularly leverage given the company's recent debt
financed dividend and share repurchase activity.  Moody's
anticipates that Entercom's 2006 pro-forma debt-to-EBITDA leverage
will approach 5.2x.  Moody's will evaluate the credit metrics in
the context of the current softness in radio advertising and
Entercom's operating performance and the strategic threats facing
the mature radio business, including emerging satellite and cross
media competition.  Moody's will also discuss the business
strategy for the existing and acquired stations with management.

Entercom Radio, LLC, headquartered in Bala Cynwyd, Pennsylvania,
is the nation's fourth largest radio broadcaster with more than
100 radio stations clustered in 22 markets across the country
including the stations acquired from CBS Corporation and Radio
One.


FERRO CORPORATION: Sells Specialty Plastics Biz for $133 Million
----------------------------------------------------------------
Ferro Corporation entered in an asset purchase agreement with
Olympic Plastics, Inc., a wholly owned subsidiary of Wind Point
Partners.

Under the Agreement Ferro has agreed to sell, and Olympic has
agreed to buy, substantially all of the assets of Ferro's
specialty plastics business, which develops and produces
customized thermoplastic compounds and alloys, plastic colorants,
gelcoats, and thermoset pastes that are marketed to manufacturers
in a broad range of markets.  In exchange for the Business,
Olympic will pay approximately $133 million in cash and will
assume certain liabilities of the Business.  Further, Olympic will
enter into transition services agreements with Ferro with respect
to certain Business locations.

The sale is scheduled to close in the third quarter of 2006.

Ferro plans to use the sale proceeds to reduce outstanding debt.

"We are focused on transforming Ferro into a high-performance
company, both operationally and financially," said CEO James F.
Kirsch. "Our new management is moving aggressively to drive
profitability and to position our operations for accelerated
growth in new geographic and customer end markets.

"We continue to evaluate our business for divestment opportunities
with the goals of reducing debt and leveraging technology and
production synergies across a narrower set of related, core
businesses that have strong growth characteristics."

The sale of Specialty Plastics is consistent with Ferro's strategy
to drive performance improvement and position the Company for
long-term growth.  The Company has been moving aggressively to
strengthen its financial results through portfolio management,
operational restructurings, business streamlining and management
realignment, as well as productivity and pricing initiatives.  It
recently announced that it is embarking on a restructuring of the
European operations of its Inorganic Specialties businesses.  The
restructuring is expected to generate annualized savings of
$40 million to $50 million by the end of 2009.

A full-text copy of the Asset Purchase Agreement is available for
free at http://ResearchArchives.com/t/s?104c

Headquartered in Cleveland, Ohio, Ferro Corporation (NYSE:FOE)
-- http://www.ferro.com/-- produces performance materials for   
manufacturers, including coatings and performance chemicals.  
The Company has operations in 20 countries and has approximately
6,800 employees globally.

                           *     *     *

As reported in the Troubled Company Reporter on April 3, 2006,
Standard & Poor's Ratings Services lowered its ratings on Ferro
Corp., including its corporate credit rating to 'B+' from 'BB'.
All ratings remain on CreditWatch with negative implications,
where they were placed Nov. 18, 2005.


FISCHER IMAGING: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Fischer Imaging Corporation
        370 Interlocken Boulevard
        Suite 400
        Broomfield, Colorado 80021

Bankruptcy Case No.: 06-15611

Type of Business: The Debtor services and manufactures medical
                  imaging systems for the screening and diagnosis
                  of disease.  Fischer Imaging began producing
                  general-purpose x-ray imaging systems in 1910
                  and is the oldest manufacturer of x-ray imaging
                  devices in the United States.  See
                  http://www.fischerimaging.com/

Chapter 11 Petition Date: August 22, 2006

Court: District of Colorado (Denver)

Judge: Elizabeth E. Brown

Debtor's Counsel: Douglas W. Jessop, Esq.
                  Jessop & Company, P.C.
                  303 East 17th Avenue, Suite 930
                  Denver, Colorado 80203
                  Tel: (303) 860-7700
                  Fax: (303) 860-7233

Total Assets: $2,235,414

Total Debts:     $26,104

Debtor's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Healthtrust Purch. Group, LP  Trade credit                $5,242
104 Continental Place
Suite 300
Brentwood, TN 37027

Exempla Lutheran              Uncashed payment            $4,211
Medical Center
8300 West 38th Avenue
Wheatridge, CO 80033

Regina Scott                  Uncashed payment            $3,155
39676 South Hoover Road
Ponchatoula, LA 70454

RPM Technology                Trade credit                $2,526

John Scarano                  Uncashed payment            $1,755

Baptist Hospital of Miami     Uncashed payment            $1,421

Kathleen Lawson               Uncashed payment            $1,321

Tony Giang                    Uncashed payment            $1,225

Elizabeth Klutts              Uncashed payment              $854

Joe Johnson                   Uncashed payment              $713

Hao Nguyen                    Uncashed payment              $548

Merrill Communications LLC    Trade Credit                  $505

North Mississippi Med Center  Uncashed payment              $492

Valparaiso Surgical Center    Uncashed payment              $444

Lori Josey                    Uncashed payment              $379

Mark Standridge               Uncashed payment              $327

John Laxton                   Uncashed payment              $218

Thomas Pugh                   Uncashed payment              $184

Mohammed Saleem Anwar         Uncashed payment              $146

Rudoph Neubeck                Uncashed payment              $106


FOAMEX INTERNATIONAL: Gets OK to Assume Lyondell Chemical Contract
------------------------------------------------------------------
Foamex L.P. obtained approval from the U.S. Bankruptcy Court for
the District of Delaware to assume its amended executory contract
with Lyondell Chemical Company, pursuant to Section 365 of the
Bankruptcy Code.

As reported in the Troubled Company Reporter on Aug. 2, 2006,
Lyondell supplied certain chemicals needed in Foamex's manufacture
of foam products.

Lyondell agreed, immediately upon the Contract's assumption, to
restore trade terms that are comparable to the original terms in
place prepetition before it exercised its contractual right to
change them to "cash-before-delivery."

In addition, Lyondell agreed to give Foamex eight weeks to pay the
$14,865,338 unpaid cure amount owed on account of Foamex's
prepetition chemical purchases.  Foamex will make eight equal
weekly payments beginning on the first Thursday that is not more
than five business days after the Court approves the assumption.

Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of       
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets.  The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries.  The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).  
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts.  Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders.  Kenneth A. Rosen,
Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and
Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the
Official Committee of Unsecured Creditors.  As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts.  (Foamex International Bankruptcy
News, Issue No. 24; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


FONIX CORP: Balance Sheet Upside-Down by $21.09 Mil. at June 30
---------------------------------------------------------------
Fonix Corp. incurred a $4,506,000 net loss on $3,259,000 of
revenues for the second quarter ending June 30, 2006, the Company
disclosed in a Form 10-Q filing delivered to the Securities and
Exchange Commission on Aug. 10, 2006.
  
As of June 30, 2006, the Company's balance sheet showed $7,041,000
in assets, $1,325,000 of which is current, and $28,136,000 in
debts, $24,811,000 of which is payable in the next 12 months.  
  
The Company's equity deficit widened to $21,095,000 as of
June 30, 2006, from a $15,226,000 deficit at Dec. 31, 2005.

                       Going Concern Doubt

Hansen, Barnett & Maxwell, the Company's auditor, expressed
substantial doubt about the Company's ability to continue as a
going concern after auditing the Company's balance sheet for the
year ending Dec. 31, 2005.  The auditor pointed to the Company's:

   -- significant losses;

   -- negative cash flows from operating activities for three
      years; and

   -- negative working capital

A full-text copy of the regulatory filing is available for free at
http://ResearchArchives.com/t/s?103f

Headquartered in Sandy, Utah, Fonix Corporation --
http://www.fonix.com/-- is a communications and technology
company that provides integrated telecommunications services and
value-added speech technologies through its wholly owned
subsidiaries and operation groups: Fonix Telecom Inc., LecStar
Telecom Inc. and The Fonix Speech Group.  The combination of
interactive speech technology and integrated telecommunications
services allows Fonix to provide customers with comprehensive,
cost-effective solutions to enhance and expand their
communications needs.


FORD MOTOR: Opening Alliance Talks with Renault-Nissan's CEO
------------------------------------------------------------
Ford Motor Co.'s Chief Executive Officer William Clay Ford Jr.,
was in talks with Carlos Ghosn, the Chief Executive Officer of
Nissan-Renault, published reports say.  Renault-Nissan is a
collaboration between Nissan Motor Co., Ltd., and Renault S.A.

The talk is one of the many efforts Ford is undertaking to improve
its profitability and regain its market share.  Ford incurred a
$254 million net loss for the second quarter of 2006.  In July
2006, reports came in that Ford was overtaken by Toyota as the
automaker with the 2nd biggest market share in the world.  Toyota
has 13%.  Ford came in third with 12.4%.  General Motors still has
the top spot though sales have been slipping.

The most recent effort was to offer credit to people with low
credit reports to get rid of excess auto inventory.  Any potential
bad debts in the future will be seen as a marketing expense.

Recent restructuring efforts include:

   -- closing more factories;
   -- cutting more management jobs by another 10% to 30%; and
   -- reducing benefits

Renault-Nissan was first in talks with GM in July as one of GM's
shareholders aggressively pushed the idea for an alliance.  GM and
Renault-Nissan is on its first month of evaluating the proposed
three-way deal.  

Mr. Ford told BusinessWeek that Ford is not a stranger to
alliances.  Ford is currently on operational alliance with
Peugeot, GM and Mazda.  Mr. Ford, however, clarified that there
are no formal discussions about anything yet with other auto
companies.  But the proposed GM-Renault-Nissan alliance had
everybody thinking that they should all be talking about it.

                         About Ford Motor

Headquartered in Dearborn, Michigan, Ford Motor Company --
http://www.ford.com/-- manufactures and distributes
automobiles in 200 markets across six continents.  With more than
324,000 employees worldwide, the company's core and affiliated
automotive brands include Aston Martin, Ford, Jaguar, Land Rover,
Lincoln, Mazda, Mercury and Volvo.  Its automotive-related
services include Ford Motor Credit Company and The Hertz
Corporation.

                         *     *     *

As reported in the Troubled Company Reporter on Aug. 22, 2006,
Dominion Bond Rating Service placed long-term debt rating of Ford
Motor Company Under Review with Negative Implications following
announcement that Ford will sharply reduce its North American
vehicle production in 2006.  DBRS lowered on July 21, 2006, Ford
Motor Company's long-term debt rating to B from BB, and lowered
its short-term debt rating to R-3 middle from R-3 high.  DBRS also
lowered Ford Motor Credit Company's long-term debt rating to
BB(low) from BB, and confirmed Ford Credit's short-term debt
rating at R-3(high).  

Fitch Ratings also downgraded the Issuer Default Rating of Ford
Motor Company and Ford Motor Credit Company to 'B' from 'B+'.  
Fitch also lowered the Ford's senior unsecured rating to 'B+/RR3'
from 'BB-/RR3' and Ford Credit's senior unsecured rating to 'BB-
/RR2' from 'BB/RR2'.  The Rating Outlook remains Negative.

Standard & Poor's Ratings Services also placed its 'B+' long-term
and 'B-2' short-term ratings on Ford Motor Co., Ford Motor Credit
Co., and related entities on CreditWatch with negative
implications.

As reported in the Troubled Company Reporter on July 24, 2006,
Moody's Investors Service lowered the Corporate Family and senior
unsecured ratings of Ford Motor Company to B2 from Ba3 and the
senior unsecured rating of Ford Motor Credit Company to Ba3 from
Ba2.  The Speculative Grade Liquidity rating of Ford has been
confirmed at SGL-1, indicating very good liquidity over the coming
12 month period.  The outlook for the ratings is negative.


GENTA INC: Posts $14.6 Mil. Net Loss in 2nd Quarter Ended June 30
-----------------------------------------------------------------
Genta Incorporated incurred a $14.6 million net loss on $379,000
of net revenues for the three months ended June 30, 2006, compared
to $1.9 million of net income on $7.9 million of net revenues in
2005, the company disclosed its second quarter financial results
on Form 10-Q to the Securities and Exchange Commission.

As of June 30, 2006, the Company's accumulated deficit widened to
$382.7 million from $358.2 million at Dec. 31, 2005.

                       Going Concern Doubt

As reported in the Troubled Company Reporter on Aug. 15, 2006,
Deloitte & Touche LLP expressed substantial doubt about Genta
Incorporated's ability to continue as a going concern after
auditing the Company's financial statements for the years ended
Dec. 31, 2005 and 2004.  The auditing firm pointed to the
Company's recurring losses and negative cash flows.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?1034

Based in Berkeley Heights, New Jersey, Genta Incorporated --
http://www.genta.com/-- is a biopharmaceutical company, which  
focuses on the treatment of patients with cancer.


GLENBOROUGH REALTY: MSRE Merger Cues Moody's to Review Ratings
--------------------------------------------------------------
Moody's Investors Service placed the ratings of Glenborough Realty
Trust on review for downgrade.  This review follows the REIT's
announcement that it has entered into a definitive agreement to be
acquired by Morgan Stanley Real Estate for $1.9 billion, which
includes repayment or assumption of Glenborough's existing debt,
and redemption of its Series A convertible preferred stock.

These ratings were placed on review for downgrade:

   Glenborough Realty Trust Incorporated
  
     * Preferred stock at Ba3;
     * Preferred stock shelf at (P)Ba3

   Glenborough Properties, L.P.

     * Unsecured debt shelf at (P)Ba1;
     * Subordinate debt shelf at (P)Ba2.

Moody's review will assess the entity that is acquiring
Glenborough Realty, and the nature of any credit support.  If
the preferred stock is entirely redeemed at closing as planned,
Moody's would anticipate confirming and withdrawing the ratings.  
Should the transaction not proceed as expected, Moody's would
evaluate any subsequent strategic actions by Glenborough Realty to
realize value from its office property portfolio, such as asset
sales or changes in capital structure, before finalizing the
review.

Glenborough Realty Trust Incorporated is a San Mateo, California,
USA-based real estate investment trust that owns 45 office
properties encompassing approximately 8 million square feet as
of June 30, 2006.  The REIT had assets of $1.3 billion and
equity of $431 million at June 30, 2006.


GOLD KIST: Pilgrim's Pride's Offer Prompts S&P's Positive Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB' corporate
credit rating and other ratings on Pilgrim's Pride Corp. on
CreditWatch with negative implications following the company's
unsolicited bid for Gold Kist Inc.

At the same time, ratings on Gold Kist, including the 'B+'
corporate credit rating, were placed on CreditWatch with positive
implications.  About $571 million (including capitalized operating
leases) of debt of Pittsburg, Texas-based Pilgrim's Pride and
about $190 million (including capitalized operating leases) of
Atlanta, Georgia-based Gold Kist's debt is affected.

The ratings of both companies were placed on CreditWatch following
Pilgrim's Pride announcement of its unsolicited proposal to
acquire Gold Kist for $20.00 per share in cash.  This would value
the transaction at about $1 billion plus the assumption of Gold
Kist's debt.  Pilgrim's Pride anticipates that it could realize
cost synergies of $50 million.

The two companies have been in discussions since February 2006;
however, Gold Kist's board of directors has rejected Pilgrim's
Pride previous proposals.  Although Gold Kist's board of directors
will review this newest proposal, the company has thus far been
resolute about its strategy of remaining an independent company.

"If Gold Kist should take defensive actions, which would suggest a
more aggressive financial policy, we would likely revise the
CreditWatch implications for Gold Kist to developing from
positive," noted Standard & Poor's credit analyst Jayne Ross.

Standard & Poor's will continue to monitor the situation and take
appropriate rating action as needed.  The ratings on both
companies could be affirmed if the transaction is not completed.
If the deal does go through, the ratings on Pilgrim Pride could be
lowered (depending on how the transaction is financed) or
affirmed.  Ratings on Gold Kist could be raised or affirmed
(depending on how the transaction is financed).

Pilgrim's Pride is the second-largest poultry producer in the
U.S., with about a 16% market share, and Gold Kist is the third-
largest poultry producer, with about a 9% share.


HARTCOURT COMPANIES: Amends 2003 Report to Account for Purchases  
----------------------------------------------------------------
Hartcourt Companies Inc. amended its Form 10-KSB for the year
ended Dec. 31, 2003, filed with the Securities and Exchange
Commission to reflect changes related to its acquisition of four
Chinese companies.

Subsequent to the issuance of financial statements for the year
ended Dec. 31, 2003, the Company determined that certain
transactions have not been accounted for properly.  

Dr. Yungeng Hu, Hartcourt's Chief Financial Officer said the
changes in the 2003 financial statements may also cause
adjustments to the financial statements for the year ended
Dec. 31, 2004 and May 31, 2005.  The Company anticipates to
include these adjustments in its Form 10-KSB for the year ended
May 31, 2006.

Hartcourt recorded net sales $131,699,218 in year 2003, compared
with $1,137,011 in 2002.  The big increase is driven by the
acquisition of the business of HuaQing, Guowei, NewHuaSun and
Zhongnan. Loss from discontinued operations is $70,360 in 2003
while the figure is $1,020,252 in 2002.

At Dec. 31, 2003, the company's balance sheet showed $33,808,151
in total assets, $15,703,645 in total liabilities, $1,895,962 of
minority interests, commitments and contingencies of $1,300,000
and total shareholders equity of $14,908,544.

A full-text copy of the company's amended 2003 annual report is
available for free at http://researcharchives.com/t/s?1037.

In an audit report dated Aug. 1, 2006, Kabani & Company Inc.
expressed substantial doubt about Hartcourt's ability to continue
as a going concern after auditing the Company's 2003 financial
statements.

The auditing firm pointed to the Company's accumulated deficit of
$51,624,284 including net loss of $570,889 for the year ended
Dec. 31, 2003.

                        Going Concern Doubt

As reported it the Troubled Company Reporter on Oct. 6, 2005,
Kabani & Company, Inc., CPA's, expressed substantial doubt about
Hartcourt's ability to continue as a going concern after it
audited the Company's financial statements for the fiscal year
ended May 31, 2005.  The auditing firm pointed to the Company's
accumulated deficit and negative cash flow from operations.

The Company has not filed its annual report for the fiscal year
ended May 31, 2006.

                         About Hartcourt

Hartcourt Companies Inc. -- http://www.hartcourt.com/-- is a  
business development company specializing in the Chinese
Information Technology market.  It researches and identifies
Chinese companies in the IT industry that meet its acquisition
criteria.  The Company then acquires equity ownership or assets in
the targeted companies to be part of its investment portfolio.
Hartcourt distributes internationally well-known brand named IT
hardware products and related software and services.  The main
products are Samsung branded notebooks and monitors.  The Company
also distributes audio and video conferencing products.


HARTCOURT COMPANIES: New Management Outlines Business Strategy  
--------------------------------------------------------------
After the new management team joined Hartcourt Companies Inc., on
June 1, 2006, the Company's shareholders were anxious to know the
business strategy the new executives plan to implement.

During recent informal meetings with company shareholders, Dr.
Yungeng Hu, the company's president and chief financial officer
and Dr. Billy Wang, the chairman of the company said the new
management is focused on creating shareholder value by seeking
higher margin business, initially in the Chinese vocational
training marketplace, and by managing the company in a very active
and professional way.  

The executives said their ultimate goals are simple: generate
revenue and profit for shareholders.  Dr. Wang and Dr Hu said that
attaining these goals are possible because the new management team
is different from the past in several respects, including their:
  
       a) sound business plan;

       b) execution capability and solid business turn-around
          track-record;

       c) willingness to communicate with stakeholders; and

       d) acknowledgement of the critical need to establish
          corporate governance at both levels of parent company
          and subsidiaries.

Asked how the new management team differ from the former ones in
terms of business planning and execution, Dr. Wang and Dr. Hu
explained the new management team members have strong credentials
in combining both Chinese and international business knowledge.  
They said the management team has the relevant track record in
successfully managing business turn-arounds in China.

The executives also promised that they will work to run the
business in a more transparent way and are determined to
communicate with not only shareholders, but with all other
stakeholders of the company.

                           New Focus

Harcourt said its new management is focused on creating
shareholder value by seeking higher margin business, initially in
the Chinese vocational training marketplace.  The Company revealed
that it intends to carry out school business acquisitions as its
core business.

Dr. Wang and Dr. Hu said the Company has researched the business
plan and conducted the feasibility study targeting the Chinese
vocational training marketplace and concluded that the schools
will increase the company's net free cash flows, which should
enhance shareholder value.

                        Going Concern Doubt

As reported it the Troubled Company Reporter on Oct. 6, 2005,
Kabani & Company, Inc., CPA's, expressed substantial doubt about
Hartcourt's ability to continue as a going concern after it
audited the Company's financial statements for the fiscal year
ended May 31, 2005.  The auditing firm pointed to the Company's
accumulated deficit and negative cash flow from operations.

The Company has not filed its annual report for the fiscal year
ended May 31, 2006.

                         About Hartcourt

Hartcourt Companies Inc. -- http://www.hartcourt.com/-- is a  
business development company specializing in the Chinese
Information Technology market.  It researches and identifies
Chinese companies in the IT industry that meet its acquisition
criteria.  The Company then acquires equity ownership or assets in
the targeted companies to be part of its investment portfolio.
Hartcourt distributes internationally well-known brand named IT
hardware products and related software and services.  The main
products are Samsung branded notebooks and monitors.  The Company
also distributes audio and video conferencing products.


HAYES LEMMERZ: Ford's Production Cuts Cue S&P's Negative Watch
--------------------------------------------------------------
Standard & Poor's Ratings Services placed Hayes Lemmerz
International Inc.'s rating on CreditWatch with negative
implications.  The CreditWatch placements reflect Standard &
Poor's decision to review the company's rating in light of Ford
Motor Co.'s announcement that it will sharply lower its North
American production in the second half of 2006, with the largest
cuts coming in the fourth quarter.

Ford's production of light trucks in the fourth quarter will be
down 155,000 units, or 28%, versus fourth-quarter 2005 production.
These cuts will adversely affect on several fronts those suppliers
with substantial Ford exposure.

Fourth-quarter cash flow and liquidity will likely be reduced from
previous expectations, perhaps significantly.  The magnitude of
the reduction in liquidity will depend on other calls on cash in
the quarter, availability under existing bank facilities, and any
mitigating actions, although such offsets within the quarter may
be limited.

The long-term effect on supplier ratings will depend on Ford's
ability to stem its market share losses, which will drive 2007
production levels.  Ford's very dramatic fourth-quarter production
cuts may turn out to be an alternative to lesser cuts extending
over several quarters into 2007.  But the negative effect on cash
flow and liquidity in the fourth quarter will increase challenges
for certain suppliers in 2007, regardless of whether more stable
production levels occur in 2007.

Standard & Poor's will assess the effect of Ford's announcement in
light of the other business challenges facing Hayes Lemmerz
International Inc.  Standard & Poor's expects to conclude its
reviews within the next two months.

Rating Placed on Creditwatch With Negative Implication:

  Hayes Lemmerz International Inc.:
  
    * to B-/Watch Neg/-- from B-/Negative/--


INN OF THE MOUNTAIN: Moody's Confirms B3 Senior Note Rating
-----------------------------------------------------------
Moody's Investors Service confirmed Inn of the Mountain Gods'
B3 corporate family rating and senior note rating and assigned a
negative ratings outlook.  This completes the ratings review
process that began Oct. 5, 2005.

The confirmation considers that, although liquidity at the casino
enterprise level remains tight, Moody's anticipates that IMG will
have enough liquidity to make its November interest payment, and
results for the first quarter of fiscal 2007 are showing some
improvement over the comparable prior year period.  Also
considered was the lower cash distribution paid to the Mescalero
Apache Tribe in fiscal 2006 versus fiscal 2005.  Additionally, the
confirmation acknowledges that IMG filed its 10-K by August 15,
2006, and received final sign-off on its expansion project.

The negative outlook takes into account that IMG is still
generating about the same level of EBITDA as it did before its
expansion opened, and that the restricted cash balance that was
held until the expansion project received final sign-off was
distributed to the Tribe and did not remain at the casino
enterprise level.  Additionally, although the Tribe arranged for
new liquidity in the form of a $5 million revolver that could be
made available to IMG, the revolver is located at the Tribe level,
not the casino enterprise level, and as a result cannot be
accessed by IMG directly.  Worth noting, however, is that the
Tribe did pass a formal resolution stating its intent to keep the
casino enterprise financially solvent.

Continued flat or declining operating performance could result
in a downgrade given that it would likely require that IMG seek
external funds to meet future debt service obligations.  A
sustainable improvement in operating results over the next several
quarters could prompt a ratings outlook revision to stable.  Any
ratings upgrade, however, would require a significant improvement
in absolute levels of EBITDA and a larger, more permanent form of
liquidity at the casino enterprise level.

Moody's previous rating action on IMG occurred on Oct. 5, 2005,
when its ratings were placed on review for possible downgrade in
response to the company's announcement that it was not able to
file its July 31, 2005 10-Q by the Sep. 30, 2005 filing date.  IMG
did eventually file its July 31, 2005 10-Q, and subsequently filed
its Oct. 31, 2005 and Jan. 31, 2006 10-Q on time.

Inn of the Mountain Gods Resort and Casino, located in Mescalero,
New Mexico, is an unincorporated enterprise of the Mescalero
Apache Tribe.  The Mescalero Apache Tribe is a federally
recognized, self-governing Indian tribe with approximately
4,100 members.


INTEGRATED HEALTH: Ex-Execs Want Trustee's Payment of Legal Fees
----------------------------------------------------------------
C. Taylor Picket and Daniel J. Booth, former officers of the
Integrated Health Services, Inc. and its debtor-affiliates, ask
the U.S. Bankruptcy Court for the District of Delaware to compel
IHS Liquidating LLC to reimburse them for certain legal expenses
they have incurred.

On Feb. 27, 2001, Don G. Angell, among others, commenced a lawsuit
against, among others, Messrs. Picket and Booth, before the U.S.
District Court for the Middle District of North Carolina.  The
stay on the Angell Lawsuit has been terminated pursuant to the
confirmation of the Debtors' plan of reorganization.

In addition, Messrs. Picket and Booth and IHS Liquidating have
been litigating several issues in the Chapter 11 cases, which
remain subjudice, relating to IHS Liquidating's obligation to
indemnify the Former Officers, including their request for the
establishment of a reserve for their administrative claims, and
the trustee's request for estimation of the claims.

In 2001, Messrs. Picket and Booth entered into separate Court-
approved employment agreements with IHS.  The agreements provide
that IHS will indemnify and hold the Former Officers harmless
against any judgments, fines, amounts paid in settlement, and
reasonable expenses in connection with any claim, action or
proceeding as a result of their employment with IHS.

Messrs. Picket and Booth complain that IHS Liquidating has not
paid their legal fees to their co-counsel, Stevens & Lee, P.C.,
for work performed from May 2005 through February 2006.

The fees relate solely to Stevens & Lee's representation of the
Former Officers in the Court as a result of the matters raised by
IHS Liquidating.  The fees do not relate to work performed in the
Angell Lawsuit.

IHS Liquidating has refused to pay the fees unless the Former
Officers agree to forego reimbursement of any and all other legal
bills incurred in the Angell Lawsuit, preservation of their claims
against the estate, or otherwise.

John D. Demmy, Esq., at Stevens & Lee, P.C., in Wilmington,
Delaware, relates that IHS Liquidating's insurer will not pay the
fees, as they do not relate to work performed in the Angell
Lawsuit.

The expenses incurred in connection with the Reserve Motion, the
Estimation Motion, and other matters relating to the proceedings
in the Bankruptcy Court are covered by the indemnifications and
must be paid by IHS Liquidating, Mr. Demmy contends.

Mr. Demmy notes that IHS Liquidating has previously paid, without
objection, the fees and costs incurred by the Former Officers in
connection with the preservation of their indemnification claims
in the Bankruptcy Court.

The Former Officers note that all of the services covered by the
legal bills submitted to IHS Liquidating are covered by its
indemnification obligations, irrespective whether the expenses are
a credit to its insurance deductible.

The Former Officers also ask Judge Walrath to compel IHS
Liquidating to reimburse them for the fees and expenses incurred
in respect of the filing and prosecution of their Motion to
Compel.

                    IHS Liquidating Objects

According to Robert S. Brady, Esq., at Young, Conaway, Stargatt &
Taylor, LLP in Wilmington, Delaware, the Debtors and IHS
Liquidating LLC have paid more than $1,000,000 defending against
claims that were asserted against the Former Officers by Don G.
Angell and his affiliates, for which Daniel J. Booth (but not C.
Taylor Picket) could be entitled to indemnification under his
separation agreement with Integrated Health Services, Inc.

Mr. Brady relates that Messrs. Booth and Picket still have the
benefit of $80,000,000 in available proceeds from an insurance
policy for directors' and officers' liability that the Debtors
purchased during their bankruptcy cases.  The D&O Policy covers
all of the Former Officers' indemnifiable legal expenses relating
to their defense against claims by third parties.

The insurance carrier has been paying Former Officers' defense
costs since March 2005 and the D&O Policy is co-extensive with the
Debtors' indemnification obligations to the Former Officers.  
However, according to Mr. Brady, if the Former Officers incurred
legal expenses for which the insurance carrier is not responsible
for, then the legal expenses are outside the scope of the Debtors
and IHS Liquidating's obligations.

IHS Liquidating refutes the Former Officers' contention that, even
though the D&O Policy does not cover the legal expenses at issue
in their request, they are somehow within the scope of IHS
Liquidating's indemnification obligations to them.

Mr. Brady argues that the legal expenses at issue clearly fall
outside the scope of any indemnification right the Former
Officers may have against IHS.  He says that the Former Officers
apparently wish to preserve their ability to pursue future
reimbursement claims, even though they have offered no legal or
contractual support for their claims and their principal
activities in the Court until now, one of which is their request
for a reserve of IHS Liquidating' funds, have not only been fully
submitted, but they have become moot.

IHS Liquidating also contests the Former Officers' claims that
they are entitled to reimbursements based upon certain provisions
of their separate prepetition employment agreements with IHS.  

Section 6.6 of his employment agreement dated Jan. 11, 2001, with
IHS provides that Mr. Booth is entitled to indemnification to the
fullest extent permitted by Delaware law for reasonable attorneys'
fees in connection with any claim against him as a result of his
having served as an officer of IHS.  However, according to Mr.
Brady, the provision is irrelevant since Section
6.6 does not provide Mr. Booth with the right to be reimbursed for
any services rendered to him for monitoring the Debtors'
bankruptcy cases.

Similarly, under Section 7(b) of a Dec. 31, 2001 agreement with
IHS, Mr. Pickett expressly waived, relinquished, released,
acquitted and forever discharged the IHS Group from all claims,
demands, damages, debts or expenses of nature arising out of or
connected with Mr. Pickett's agreements with the IHS Group up to
the date on which the Agreement is fully executed.

Consequently, IHS Liquidating asks the Court to deny Messrs. Booth
and Picket's request.

Integrated Health Services, Inc. -- http://www.ihs-inc.com/--  
operated local and regional networks that provide post-acute care
from 1,500 locations in 47 states.  The Company and its
437 debtor-affiliates filed for chapter 11 protection on
Feb. 2, 2000 (Bankr. Del. Case No. 00-00389).  Rotech Medical
Corporation and its direct and indirect debtor-subsidiaries broke
away from IHS and emerged under their own plan of reorganization
on March 26, 2002.  Abe Briarwood Corp. bought substantially all
of IHS' assets in 2003.  The Court confirmed IHS' Chapter 11 Plan
on May 12, 2003, and that plan took effect September 9, 2003.
Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D.
Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP,
represent the IHS Debtors.  On September 30, 1999, the Debtors
listed $3,595,614,000 in consolidated assets and $4,123,876,000 in
consolidated debts.  (Integrated Health Bankruptcy News, Issue
No. 108; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


KING PHARMA: Moody's Withdraws Ba3 Rating on 2-3/4% Debentures
--------------------------------------------------------------
Moody's Investors Service withdrew the Ba3 rating on King
Pharmaceuticals, Inc.'s 2-3/4% senior convertible debentures due
2021 for business reasons.

A significant portion of the $345 million issuance was repaid
during 2006.  On March 29, 2006, King repurchased $165 million
of the debentures prior to maturity.  On June 2, 2006, King
completed a tender offer, repurchasing $175.7 million of the
debentures. King reported that as of June 30, 2006, $4.3 million
of the debentures remained outstanding.

The remaining ratings of King are unaffected by this rating
action.  These include the Ba3 Corporate Family rating and the Ba2
rating on King's $400 million senior secured credit facility.  
Moody's does not rate King's $400 million convertible senior notes
due 2026.

King Pharmaceuticals, Inc., headquartered in Bristol, Tennessee,
manufactures, markets, and sells primarily acquired branded
prescription pharmaceutical products.  The company reported
revenues of approximately $1.8 billion in 2005.


KMART CORP: Roberts Estate Wants Plan Injunction Modified
---------------------------------------------------------
The Estate of Tony Roberts asks the U.S. Bankruptcy Court for the
Northern District of Illinois to modify the injunction provision of
Kmart Corp. and its debtor-affiliates' confirmed Plan of
Reorganization to permit the Estate to liquidate its
administrative claim against Kmart Corp. before the Court of
Common Pleas for the Fourteenth Judicial Circuit in Colleton
County, South Carolina.

The Roberts' Estate Claim arises from an automobile accident in
October 2002, allegedly caused by Thomas Sullivan -- a Kmart
employee -- that resulted to Mr. Roberts' death.

In October 2004, the Roberts Estate filed a complaint against
Kmart Corporation in the Court of Common Pleas for the Fourteenth
Judicial Circuit.

After obtaining leave to file a claim, the Roberts Estate
participated in the alternative dispute resolution procedures
required by the Court, submitting its completed questionnaire to
Kmart.  Kmart responded to the Questionnaire asserting that it
was reserving less than $50,000 and that it would make no offer
on the Claim.  Kmart further stated that it is rejecting the
amount demanded in the Questionnaire because of the Roberts
Estate's failure to provide evidence.

Jeremy C. Kleinman, Esq., at Frank/Gecker LLP, in Chicago,
Illinois, relates that during the year following the submission
of the Questionnaire, the Roberts Estate has participated in the
ADR Procedures in good faith.  However, the Estate has been
unable to conduct discovery in the matter.

"The parties have reached an impasse and the Claim cannot be
resolved through the ADR Procedures," Mr. Kleinman tells the
Court.

Mr. Kleinman maintains that cause exists to modify the Plan
Injunction for the reasons that:

    * the Roberts Estate has satisfied the ADR Procedures in good
      faith;

    * Kmart is not entitled to impose additional procedural
      restrictions to prevent the Roberts Estate from liquidating
      its Claim;

    * the ADR Procedures do not permit Kmart to impede the
      litigation of a wrongful death claim on the basis that
      Kmart does not believe it has any liability;

    * the Roberts Estate has suffered, and continues to suffer,
      as a result of the delay in the liquidation of the Claim
      imposed by the Plan Injunction; and

    * Kmart will not be prejudiced by granting the relief
      requested.

                        About Kmart Corp.

Headquartered in Troy, Michigan, Kmart Corporation nka KMART
Holding Corporation -- http://www.bluelight.com/-- operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam.  The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474).  Kmart emerged from chapter 11 protection on May 6,
2003.  John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts.  The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection.  Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues.  The waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act
expired on Jan. 27, without complaint by the Department of
Justice.  (Kmart Bankruptcy News, Issue No. 115; Bankruptcy
Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-
7000)


KMART CORP: Seeks Summary Judgment on Eagle's $329,452 Claim
------------------------------------------------------------
Kmart Corp. asks the U.S. Bankruptcy Court for the Northern
District of Illinois for a summary judgment disallowing:

    (i) Eagle Janitorial Services Inc.'s claim for services
        performed in California; and

   (ii) any claim for interest, other charges, or not otherwise
        supported with documentation.

On July 29, 2002, Eagle Janitorial filed Claim No. 36815 asserting
$329,452 for janitorial services provided to Kmart stores located
in four states.

The Claim is based on 201 invoices, of which 193 are for services
provided to Kmart stores in California.  The invoices show
charges totaling $214,075, which is $115,377 less than the face
amount of Claim No. 36815.

Of the Total Invoice Amount, $201,860 is for services rendered to
Kmart stores in California.

Kmart objected to Eagle's claim asserting that the claim lacked
sufficient documentation.  Kmart's books and records also show no
debt owed to Eagle.

George R. Mesires, Esq., at Barack Ferrazzano Kirschbaum
Perlman & Nagelberg LLP, in Chicago, Illinois, asserts that the
California Invoices are barred by the California statute of
limitations.  Hence, no interest or other charges, including
attorneys' fees, should be allowed for the invoices.

In addition, Mr. Mesires explains that Kmart is entitled to
summary judgment because:

    * Eagle cannot dispute what appears on its own Pre-1998
      Invoices that the services for which it now makes a claim
      were performed outside of the four-year statute of
      limitations period;

    * all Eagle has shown to support its claim are its invoices
      and has not produced evidence showing Kmart's actual
      request or receipt of the services described in the
      invoices; and

    * the difference between the claim amount and the invoice
      amount, which is $115,377 -- purportedly for interest -- is
      not explained on either Eagle's Proof of Claim or in its
      response to Kmart's Objection to the Claim.

Eagle's Claim for interest and other charges is likewise invalid
because the Claim fails to include an itemized statement of
interest charges, Mr. Mesires asserts.

Mr. Mesires tells the Court that if summary judgment is granted,
Eagle will have a remaining claim of $12,214 -- a Class 7 claim
under the Debtors' confirmed Plan of Reorganization entitled to a
cash distribution of $763.

Although Kmart believes that the entire Claim is without merit
because there is no evidence that Eagle actually performed the
services, given the small amount that would remain if summary
judgment is granted, Kmart would simply allow the remaining claim
rather than litigate further over it, Mr. Mesires explains.

Kmart also asks the Court to stay discovery relating to the
California Invoices and the Claim.

Since a vast majority of Eagle's Claim is barred by the
applicable statute of limitations, discovery relating to the
Claim is, therefore, barred as a matter of law, Mr. Mesires adds.

                        Eagle Talks Back

Victor J. Yoo, Esq., at Tax Lawyers Consulting Group, APC, in Los
Angeles, California, asserts that Eagle's entire claim is valid
from a limitation of action standpoint.

Mr. Yoo explains that California's limitation of action statutes
and applicable California case law provide that Eagle's entire
Claim is subject to a four-year statute of limitation that begins
to run on the last date of service or payment by Kmart of the
account.

Eagle's last date of service, which is August 30, 1998, is within
four years of the filing of its initial Proof of Claim in 2002,
Mr. Yoo points out.

With respect to Eagle's claim for the Interest Amount, Mr. Yoo
says omitting from the Proof of Claim the precise manner in which
interest on the principal was calculated is de minimis, which
omission can be corrected by the filing of an amended proof of
claim.

Furthermore, Mr. Yoo notes that Eagle is unable to state what
Kmart's records might show because Kmart has refused to respond
to Eagle's discovery requests.  Mr. Yoo argues that the non-
existence of documents in Kmart's books and records is far from
conclusive that Kmart is not liable for Eagle's Claim.

                        About Kmart Corp.

Headquartered in Troy, Michigan, Kmart Corporation nka KMART
Holding Corporation -- http://www.bluelight.com/-- operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam.  The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474).  Kmart emerged from chapter 11 protection on May 6,
2003.  John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts.  The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection.  Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues.  The waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act
expired on Jan. 27, without complaint by the Department of
Justice.  (Kmart Bankruptcy News, Issue No. 115; Bankruptcy
Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-
7000)


LARGE SCALE: Taps Sugarman & Company as Financial Consultant
------------------------------------------------------------
Large Scale Biology Corporation and its debtor affiliates ask the
U.S. Bankruptcy Court for the Eastern District of California for
permission to employ Sugarman & Company LLP as their financial
consultant, nunc pro tunc to July 14, 2006.

The Debtors say that along with the Official Committee of
Unsecured Creditors, they have selected Sugarman & Company to be
the Plan Administrator.  The Debtors disclose that they want to
employ Sugarman & Company as financial consultants prior to
becoming Plan Administrator.  The Debtors tell the Court that they
want Sugarman & Company to be involved with the strategy and
planning for confirmation and implementation of the Plan.

The Debtors say that they will file a separate request to employ
Sugarman & Company as Plan Administrator.

The Debtors say that as financial consultant, Randy Sugarman, at
Sugarman & Company, may become a member of Large Scale's board of
directors in order to facilitate and assist the Debtors in
preparation and implementation of the Plan.  Sugarman & Company
will also have full authority to assist the Debtors in any manner
requested in order to complete its task.

The Debtors tell the Court that Mr. Sugarman will bill $400 per
hour for this engagement.  The Debtors discloses that other
professionals of the firm will bill:

       Professional                      Hourly Rate
       ------------                      -----------
       Partners                              $250
       Managers                          $225 - $325
       Administrative                     $50 - $100

To the best of the Debtors' knowledge, the firm does not hold any
interest materially adverse to their estates, creditors or equity
security holders.

Headquartered in Vacaville, California, Large Scale Biology
Corporation -- http://www.lsbc.com/-- develops, manufactures and
sells plant-made pharmaceutical proteins and vaccines.  LSBC and
its debtor-affiliates filed for chapter 11 protection on Jan. 9,
2006. (Bankr. E.D. Calif. Case No. 06-20046).  Paul J. Pascuzzi,
Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi, represent
the Debtors in their restructuring efforts.  Donna T. Parkinson,
Esq., in Sacramento, California, represents the Official Committee
of Unsecured Creditors.  At June 30, 2006, Large Scale Biology
Corporation's balance sheet showed total assets of $19,733,999 and
total debts of $8,895,285.


LARGE SCALE: Wants Exclusive Period to Confirm a Plan Extended
--------------------------------------------------------------
Large Scale Biology Corporation, and its debtor-affiliates, ask
the U.S. Bankruptcy Court for the Eastern District of California
to extend, until Nov. 7, 2006, its exclusive period to confirm a
plan of reorganization.

The Debtors relate that the Court had approved their Amended
Disclosure Statement explaining their Amended Joint Plan of
Liquidation on June 19, 2006.  The Court had scheduled the hearing
to confirm the Debtor's plan for July 31, 2006, but was continued
to Aug. 28, 2006.

The Court had also extended the Debtors' exclusive period to
obtain acceptances of the joint plan from July 10, 2006, through
Aug. 31, 2006.

The Debtors disclose that they have already solicited votes
pursuant to the Plan and results show overwhelming acceptance of
the Plan.  100% of the class of unsecured creditors voted to
accept the Plan while 95% of the class of shareholders voted to
accept the Plan.

The Debtors say that they are working on the employment
arrangement for Sugarman & Company LLP as Plan Administrator and
are in the process of finalizing a license transaction that is
expected to contribute to the funds necessary for payment of
obligations under the Plan.  The Debtor expects Sugarman & Company
to examine their budget situation to ensure successful
implementation of the Plan once it is confirmed.

The Debtors need to determine whether they have sufficient cash
reserves after payment of obligations due shortly after
confirmation of the Plan to successfully implement the Plan.  The
Debtors disclose that it is possible that they may amend the Plan
to amend these purposes.

The Debtors contend that they want the extension out of an
abundance of caution.

Headquartered in Vacaville, California, Large Scale Biology
Corporation -- http://www.lsbc.com/-- develops, manufactures and
sells plant-made pharmaceutical proteins and vaccines.  LSBC and
its debtor-affiliates filed for chapter 11 protection on Jan. 9,
2006. (Bankr. E.D. Calif. Case No. 06-20046).  Paul J. Pascuzzi,
Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi, represent
the Debtors in their restructuring efforts.  Donna T. Parkinson,
Esq., in Sacramento, California, represents the Official Committee
of Unsecured Creditors.  At June 30, 2006, Large Scale Biology
Corporation's balance sheet showed total assets of $19,733,999 and
total debts of $8,895,285.


LE GOURMET: Section 341(a) Meeting Set for September 13
-------------------------------------------------------
The U.S. Trustee for Region 3 set a meeting if Le Gourmet Chef,
Inc.'s creditors at 12:00 noon, on Sept. 13, 2006, at the Office
of the U.S. Trustee, Raymond Boulevard, One Newark Center, Suite
1401 in Newark, New Jersey.  This is the first meeting of
creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy
cases.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Headquartered in Paramus, New Jersey, Le Gourmet Chef, Inc., --
http://www.legourmetchef.com/-- is a retailer specializing in   
solutions for entertaining and gift giving.  The Company filed for
bankruptcy on Aug. 8, 2006 (Bankr. D. N.J. Case No. 06-17364).  
John DiIorio, Esq., at Shapiro & Croland, and Wendy G. Marcari,
Esq., at Traub, Bonacquist, & Fox, LLP, represent the Debtor.  
When the Debtor filed for bankruptcy, the Debtor estimated its
assets and debts at $10 million to $50 million.


LE GOURMET: Taps FTI Consulting as Financial Advisor
----------------------------------------------------
Le Gourmet Chef, Inc., asks the U.S. Bankruptcy Court for the
District of New Jersey for permission to employ FTI Consulting,
Inc., as its financial advisors.

FTI Consulting will:

    a. assist the Debtor in complying with the financial reporting
       requirement under the guidelines issued by the U.S.
       Trustee;

    b. prepare and review cash or other projections, reports and
       analyses, and statement of receipts, disbursement and
       indebtedness;

    c. consult with the Debtor's management in connection with the
       financial matters relating to the ongoing activities of the
       Debtor;

    d. provide assistance with the analysis and reconciliation of
       claims;

    e. assist the Debtor in preparing its schedules and statement
       of financial affairs, and any required federal, state or
       local tax returns;

    f. assist in the development and negotiation of a plan of
       reorganization or liquidation; and

    g. assist with other matters as management or counsel to the
       Debtor may request from time to time.

Kevin Regan, Senior Managing Director at FTI Consulting, tells the
Court that the firm's professionals bill:

       Professional                      Hourly Rate
       ------------                      -----------
       Senior Managing Director          $595 - $655
       Director/Managing Director        $465 - $585
       Associates/Senior Associates      $245 - $400
       Administrative/Paraprofessional    $95 - $175

Mr. Regan assures the Court that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.

Headquartered in Paramus, New Jersey, Le Gourmet Chef, Inc., --
http://www.legourmetchef.com/-- is a retailer specializing in   
solutions for entertaining and gift giving.  The Company filed for
bankruptcy on Aug. 8, 2006 (Bankr. D. N.J. Case No. 06-17364).  
John DiIorio, Esq., at Shapiro & Croland, and Wendy G. Marcari,
Esq., at Traub, Bonacquist, & Fox, LLP, represent the Debtor.  
When the Debtor filed for bankruptcy, the Debtor estimated its
assets and debts at $10 million to $50 million.


LIONEL LLC: Gets Open-Ended Deadline to File Chapter 11 Plan
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended the period within which Lionel L.L.C., and its debtor
affiliate Liontech Company can:

   a) file a plan of reorganization until the date that is 75 days
      after the date on which the Sixth Circuit decision in
      connection with the appeal; and

   b) solicit acceptances on that plan through the date that is
      135 days after the Decision Date.

                         MTH Litigation

As reported in the Troubled Company Reporter on Feb. 2, 2006, the
Debtors commented that the intellectual property suit filed
against them by Mike's Train House -- one of Lionel's main
competitors -- still remains a material obstacle in the proposal
of their reorganization plan.

In the MTH Litigation, the Debtors brought on appeal the
$38,608,305 judgment and injunctive relief, which the United
States District Court for the Eastern District of Michigan granted
in favor of MTH, based on a jury verdict.  The Appeal is now
pending in the United States Court of Appeals for the Sixth
Circuit.

In 2000, Mike's Train House sued Lionel accusing Lionel, among
other things, of violating the Michigan Uniform Trade Secrets Act.

In its suit, MTH alleged that Korea Brass -- one of Lionel's
former Korean suppliers -- stole confidential design drawings and
scheduling information from MTH's Korean supplier, Samhongsa, and
then used that information to design and build trains for Lionel.

MTH further alleged that Lionel knew or should have known that its
trade secrets were being incorporated into Lionel products, and
contended that it had experienced both lost sales and an erosion
of its overall profitability as a result of the misconduct.

Adam C. Harris, Esq., at O'Melveny & Myers LLP, in New York,
asserted that due to the magnitude of the MTH Judgment on the
Debtors' resources and other secured and unsecured debts, the
outcome of the appeal would directly impact the terms of any plan
of reorganization that the Debtors may propose.

Mr. Harris pointed out that the MTH Judgment is more than three
times the aggregate amount of all other prepetition general
unsecured claims.  The Debtors expect only $12 million of allowed,
prepetition general unsecured claims, other than MTH's claims.

Thus, Mr. Harris said, depending on the enterprise value of the
Debtors' estate, the decision of the Sixth Circuit may well
determine whether the holders of allowed general unsecured claims
will recover 100% of the allowed amount of their claims, or
substantially less due to the dilution caused by the MTH Judgment.
The outcome of the appeal would also likely dictate whether the
equity security holders of Lionel receive any recovery at all, Mr.
Harris added.

                          Oral Arguments

The Sixth Circuit held oral arguments on June 7, 2006.  The
Debtors believe that the Sixth Circuit may not issue its decision
on or before Dec. 31, 2006.  Mr. Harris states that there can be
no assurance when that decision will be available, or what the
outcome of the appeal will be.

The Debtors can now have enough time to evaluate that decision and
formulate a plan of reorganization once the decision is rendered.

Headquartered in Chesterfield, Michigan, Lionel LLC --
http://www.lionel.com/-- is a marketer of model train products,  
including steam and die engines, rolling stock, operating and non-
operating accessories, track, transformers and electronic control
devices.  The Company filed for chapter 11 protection on Nov. 15,
2004 (Bankr. S.D.N.Y. Case No. 04-17324).  Abbey Walsh Ehrlich,
Esq., at O'Melveny & Myers, LLP, and Adam Craig Harris, Esq., and
Adam L. Hirsch, Esq., Schulte Roth & Zabel, LLP , represent the
Debtors on their restructuring efforts.  When the Company filed
for protection from its creditors, it estimated assets between $10
million and $50 million and estimated debts more than $50 million.


MARK IV: Ford's Production Cuts Prompt S&P's Negative Watch
-----------------------------------------------------------
Standard & Poor's Ratings Services placed Mark IV Industries
Inc.'s rating on CreditWatch with negative implications.  The
CreditWatch placements reflect Standard & Poor's decision to
review the company's rating in light of Ford Motor Co.'s
announcement that it will sharply lower its North American
production in the second half of 2006, with the largest cuts
coming in the fourth quarter.

Ford's production of light trucks in the fourth quarter will be
down 155,000 units, or 28%, versus fourth-quarter 2005 production.
These cuts will adversely affect on several fronts those suppliers
with substantial Ford exposure.

Fourth-quarter cash flow and liquidity will likely be reduced from
previous expectations, perhaps significantly.  The magnitude of
the reduction in liquidity will depend on other calls on cash in
the quarter, availability under existing bank facilities, and any
mitigating actions, although such offsets within the quarter may
be limited.

The long-term effect on supplier ratings will depend on Ford's
ability to stem its market share losses, which will drive 2007
production levels.  Ford's very dramatic fourth-quarter production
cuts may turn out to be an alternative to lesser cuts extending
over several quarters into 2007.  But the negative effect on cash
flow and liquidity in the fourth quarter will increase challenges
for certain suppliers in 2007, regardless of whether more stable
production levels occur in 2007.

Standard & Poor's will assess the effect of Ford's announcement in
light of the other business challenges facing Mark IV Industries
Inc.  Standard & Poor's expects to conclude its reviews within the
next two months.

Rating Placed on Creditwatch With Negative Implication:

                                 To                From
                                 --                ----
Mark IV Industries Inc.:   B+/Watch Neg./--    B+/Negative/--


METALDYNE CORP: Ford's Production Cuts Cue S&P's Negative Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed Metaldyne Corp.'s rating
on CreditWatch with negative implications.  The CreditWatch
placements reflect Standard & Poor's decision to review the
company's rating in light of Ford Motor Co.'s announcement that it
will sharply lower its North American production in the second
half of 2006, with the largest cuts coming in the fourth quarter.

Ford's production of light trucks in the fourth quarter will be
down 155,000 units, or 28%, versus fourth-quarter 2005 production.
These cuts will adversely affect on several fronts those suppliers
with substantial Ford exposure.

Fourth-quarter cash flow and liquidity will likely be reduced from
previous expectations, perhaps significantly.  The magnitude of
the reduction in liquidity will depend on other calls on cash in
the quarter, availability under existing bank facilities, and any
mitigating actions, although such offsets within the quarter may
be limited.

The long-term effect on supplier ratings will depend on Ford's
ability to stem its market share losses, which will drive 2007
production levels.  Ford's very dramatic fourth-quarter production
cuts may turn out to be an alternative to lesser cuts extending
over several quarters into 2007.  But the negative effect on cash
flow and liquidity in the fourth quarter will increase challenges
for certain suppliers in 2007, regardless of whether more stable
production levels occur in 2007.

Standard & Poor's will assess the effect of Ford's announcement in
light of the other business challenges facing Metaldyne Corp.  
Standard & Poor's expects to conclude its reviews within the next
two months.

Rating Placed on Creditwatch With Negative Implication:

                              To               From
                              --               ----
       Metaldyne Corp.:  B/Watch Neg./--   B/Negative/--


MIRANT CORP: 52 Million Shares Tendered in "Dutch Auction"
----------------------------------------------------------
Mirant Corporation reported preliminary results of its modified
"Dutch auction" tender offer to purchase up to 43,000,000 shares
of the company's common stock, which expired at 5:00 p.m., New
York City time, on Monday, Aug. 21, 2006.

Based upon the preliminary count by Mellon Investor Services, the
depositary for the tender offer, 52,216,895 shares were validly
tendered and not withdrawn at a price at or below $28.50,
including 23,170,338 shares tendered through notice of guaranteed
delivery.  Based on these preliminary results, the company expects
to purchase 43,000,000 shares in the tender offer, subject to
proration, at $28.50 per share.  These shares represent
approximately 14% of the shares outstanding as of June 30, 2006.

The number of shares to be purchased and the price per share are
preliminary.  The determination of the final number of shares to
be purchased, the final price per share and the proration factor,
if any, is subject to confirmation by the depositary of the proper
delivery of the shares validly tendered and not withdrawn.  The
actual number of shares purchased, the final purchase price, and
the proration factor, if any, will be disclosed promptly following
completion of the verification process.  Payment for the shares
accepted for purchase, and return of all other shares tendered,
will occur promptly after completion of the final purchase price
and proration computations, if applicable.

Any questions with regard to the tender offer may be directed to
Innisfree M&A Incorporated, the Information Agent for the Offer,
at 1-877-750-5836, or J.P. Morgan Securities Inc., the Dealer
Manager for the Offer, at 1-877-371-5947.

Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR)
-- http://www.mirant.com/-- is an energy company that produces
and sells electricity in North America, the Caribbean, and the
Philippines.  Mirant owns or leases more than 18,000 megawatts of
electric generating capacity globally.  Mirant Corporation filed
for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-
46590), and emerged under the terms of a confirmed Second Amended
Plan on Jan. 3, 2006.  Thomas E. Lauria, Esq., at White & Case
LLP, represented the Debtors in their successful restructuring.
When the Debtors filed for protection from their creditors, they
listed $20,574,000,000 in assets and $11,401,000,000 in debts.
The Debtors emerged from bankruptcy on Jan. 3, 2006.  (Mirant
Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)

                           *     *     *

As reported in the Troubled Company Reporter on July 17, 2006,
Moody's Investors Service downgraded the ratings of Mirant
Corporation and its subsidiaries Mirant North America, LLC and
Mirant Americas Generation, LLC.  The Ba2 rating for Mirant Mid-
Atlantic, LLC's secured pass through trust certificates was
affirmed.  The rating outlook is stable for Mirant, MNA, MAG, and
MIRMA.

Moody's downgraded Mirant Americas Generation, LLC's Senior
Unsecured Regular Bond/Debenture, to B3 from B2.  Moody's also
downgraded Mirant Corporation's Corporate Family Rating, to B2
from B1, and Speculative Grade Liquidity Rating, to SGL-2 from
SGL-1.  Mirant North America, LLC's Senior Secured Bank Credit
Facility, was also downgraded to B1 from Ba3 and its Senior
Unsecured Regular Bond/Debenture, to B2 from B1.

As reported in the Troubled Company Reporter on July 13, 2006,
Fitch Ratings placed the ratings of Mirant Corp., including the
Issuer Default Rating of 'B+', and its subsidiaries on Rating
Watch Negative following its announced plans to buy back stock and
sell its Philippine and Caribbean assets.

Ratings affected are Mirant Corp.'s 'B+' Issuer Default Rating and
Mirant Mid-Atlantic LLC's 'B+' Issuer Default Rating and the Pass-
through certificates' 'BB+/Recovery Rating RR1'.

Fitch also placed Mirant North America, Inc.'s Issuer Default
Rating of 'B+', Senior secured bank debt's 'BB/RR1' rating, Senior
secured term loan's 'BB/RR1' rating, and Senior unsecured notes'
'BB-/RR1' rating on Rating Watch Negative.  Mirant Americas
Generation, LLC's Issuer Default Rating of 'B+' and Senior
unsecured notes' 'B/RR5' rating was included as well.

Standard & Poor's Ratings Services also placed the 'B+' corporate
credit ratings on Mirant Corp. and its subsidiaries, Mirant North
American LLC, Mirant Americas Generating LLC, and Mirant Mid-
Atlantic LLC, on CreditWatch with negative implications.


MUSICLAND HOLDING: Court Approves Supplemental Incentive Plan
-------------------------------------------------------------
The Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the
Southern District of New York permits Musicland Holding Corp. and
its debtor-affiliates to make payments under the Incentive Plan
from the Incentive Pools, aggregating $816,200, in accordance with
their stated policies.

Judge Bernstein rules that the SIP Payments will be paid out of
the $26,000,000 in proceeds of the Secured Trade Creditor
Collateral, to be distributed to the Collateral Agent for the
Secured Trade Creditors.

Judge Bernstein further rules that the Secured Trade Agent and the
Secured Trade Creditors, or their successors-in-interest or
assigns, will not be entitled to a Secured Trade Credit
Replacement Lien or a Secured Trade Credit 507(b) Claim, or an
administrative priority claim, against the Debtors for the SIP
Payment.

As reported in the Troubled Company Reporter on March 3, 2006,
James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, told the
Court that as part of the Debtor's initiatives to stabilize and
rationalize their operations, and to maintain morale among
employees, they sought to implement a Modified Corporate MIP that,
if approved, would pay participating employees 25% of their fiscal
year 2006 target bonuses.

The Debtors have calibrated the Modified Corporate MIP to reward
participants for their contribution to the Debtors' operations and
additional responsibilities postpetition.

The Debtors also sought to implement a supplemental incentive
program to further incentivize those employees who will be working
over the next several months to design and present a feasible
business plan for a stand-alone Chapter 11 plan of reorganization.

Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 16; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


MUSICLAND HOLDING: Will Pay $26 Mil. to Secured Trade Debt Holders
------------------------------------------------------------------
Judge Stuart M. Bernstein of the U.S. Bankruptcy Court for the
Southern District of New York authorizes Musicland Holding Corp.
and its debtor-affiliates to immediately repay up to $26,000,000
of the principal amount due and outstanding to the Collateral
Agent to be distributed to the holders of the Secured Trade Debt.

If a Secured Trade Debt holder receives any portion of the
Interim Distribution and if a court of competent jurisdiction
finds that that the Secured Holder did not hold an allowed secured
claim, Judge Bernstein directs the Secured Holder to reimburse the
other Secured Holders an amount equal to the Interim Distribution.

Nothing in the Order will be deemed to waive or otherwise impair
any rights the Official Committee of Unsecured Creditors may have
under Section 4.6.3 of the Final DIP Order, or the Committee's
appeal of the Final DIP Order, or any claims or causes of action
the Committee may have.

As reported in the Troubled Company Reporter on Aug. 4, 2006,
Jonathan P. Friedland, Esq., at Kirkland & Ellis LLP, in New York,
said that allowing the Debtors to make the proposed principal
repayment falls within Section 105(a) of the Bankruptcy Code.

The holders of the Secured Trade Debt will receive the vast
majority of the distributions in the Debtors' Chapter 11 cases,
Mr. Friedland notes.  After distributing the $26,000,000, the
Debtors will retain enough money to fully pay any claims that the
Court may determine to stand ahead of the claims of the holders of
the Secured Trade Debt, including all accrued and to-be accrued
administrative and other priority expenses.

In addition, Mr. Friedland continues, repaying some of the
Secured Trade Debt would benefit the holders in that their
acceptable investment risk level would likely allow them to earn
more than the investment return the funds earn while the Debtors
invest only in low risk bank deposits acceptable to the U. S.
Trustee.

Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 16; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


NATURADE INC: Redux Completes Controlling Interest Acquisition
--------------------------------------------------------------
Redux Holdings, Inc., has successfully completed the acquisition
of a controlling interest in Naturade, Inc.

Adam Michelin, chief executive officer and chairman, stated, "I am
pleased to announce [the] acquisition.  Effective immediately,
Richard Munro will step in as CEO of Naturade.  Bill Stewart will
continue in his role as President.  I am confident that their
combined leadership and experience will ensure positive forward
progress within the Naturade organization for many years to come."

Mr. Munro, who will serve as chief executive officer of Naturade,
has over 20 years experience in executive leadership, operations
and turnarounds in both mature and entrepreneurial environments.

"I look forward to the tremendous opportunity at Naturade.  The
company has a rich history and heritage that will serve as a
strong platform for future business endeavors" Mr. Munro, said.

Bill Stewart, who has served as chief executive officer and
president of Naturade for the past eight years, commented on the
acquisition, "I am excited about the involvement of Redux with
Naturade and look forward to the opportunity to work with Adam and
Richard to maximize the Naturade brands."

                      About Redux Holdings

Headquartered in Los Angeles, Redux Holdings (Pink Sheets: RDXH) -
- http://www.reduxholdings.com/-- acquires assets of under  
performing and distressed companies on a non-cash basis and
isolates, recombines and manages those assets to increase their
value and to develop profitable strategic options.  The Company is
distinguished by the extensive experience of its personnel in
quickly identifying, analyzing and stabilizing these businesses
opportunities and effecting rapid turnaround and asset
monetization.

                          About Naturade

Naturade Inc. is a branded natural products marketing company
focused on growth through innovative, scientifically supported
products designed to nourish the health and well being of
consumers.  The Company primarily competes in the overall market
for natural, nutritional supplements.

At March 31, 2006, Naturade Inc.'s balance sheet showed total
assets of $11,839,862 and total liabilities of $14,106,365,
resulting in a $5,786,503 stockholders' deficit.


NORTEL NETWORKS: Chosen as Supplier for France's Bouygues Telecom
-----------------------------------------------------------------
Nortel Networks Corporation disclosed that Bouygues Telecom
selected Nortel as one of its suppliers for its national high-
speed mobile internet and voice network.

The Company disclosed that the advanced UMTS network, based on its
HSDPA technology, is being designed to provide customers in France
with services such as high-quality live TV, high definition video
on demand, MP3 streaming and multi-user mobile gaming when it goes
live in early 2007.

The Company also disclosed that the new 5-year contract stipulates
that it is Responsible for rolling out the network in 4 out of 6
of the Bouygues' operational regions in France; including the
Western, South Western, Northeastern and Mediterranean regions.

"We have strong ties with Bouygues Telecom, having supplied their
network from their first GSM implementation through to our EDGE
solutions, and now we will help them take the important next step
to 3.5G," Michel Clement, the Company's president of Southern
Europe, said.  "Nortel's HSDPA technology allows mobile operators
to provide new real-time services that increase the end-user's
experience and helps build customer loyalty."

The Company is currently a key supplier of the Bouygues' EDGE and
GPRS networks.  The current infrastructure provides the Bouygues
with the appropriate foundation for the new network upgrade.

The Company achieved the industry's first HSDPA mobile call in
January 2005.  It completed the first live test calls using a
commercial handset solution for HSDPA in March 2005.  In June
2005, the Company became the first wireless network supplier to
complete the TL9000 registration standard for Quality Management
System Requirements and Measurements across its HSDPA, UMTS and
GSM wireless infrastructure solutions.

In addition to Bouygues Telecom, the Company has worked with a
number of wireless operators on HSDPA deployments, including
Orange France, Vodafone Spain in Barcelona, during 3GSM World
Congress in February 2006, EDGE Wireless in the US, SKT and KTF in
Korea, Partner Communications in Israel, and Mobilkom Austria.

Headquartered in Ontario, Canada, Nortel Networks Corporation
(NYSE/TSX: NT) -- http://www.nortel.com/-- is a recognized leader  
in delivering communications capabilities that enhance the human
experience, ignite and power global commerce, and secure and
protect the world's most critical information.  Serving both
service provider and enterprise customers, Nortel delivers
innovative technology solutions encompassing end-to-end broadband,
Voice over IP, multimedia services and applications, and wireless
broadband designed to help people solve the world's greatest
challenges.  Nortel does business in more than 150 countries.

                           *     *     *

As reported in the Troubled Company Reporter on July 10, 2006,
Dominion Bond Rating Service confirmed the long-term ratings of
Nortel Networks Capital Corporation, Nortel Networks Corporation,
and Nortel Networks Limited at B (low) along with the preferred
share ratings of Nortel Networks Limited at Pfd-5 (low).  All
trends are Stable.

DBRS confirmed B (low) Stb Senior Unsecured Notes; B (low) Stb
Convertible Notes; B (low) Stb Notes & Long-Term Senior Debt;
Pfd-5 (low) Stb Class A, Redeemable Preferred Shares; and Pfd-5
(low) Stb Class A, Non-Cumulative Redeemable Preferred Shares.

As reported in the Troubled Company Reporter on June 20, 2006,
Moody's Investors Service affirmed the B3 corporate family rating
of Nortel; assigned a B3 rating to the proposed $2 billion senior
note issue; downgraded the $200 million 6.875% Senior Notes due
2023 and revised the outlook to stable from negative.

Standard & Poor's also affirmed its 'B-' long-term and 'B-2'
short-term corporate credit ratings on the company, and assigned
its 'B-' senior unsecured debt rating to the company's proposed $2
billion notes.  The outlook is stable.


NORTHWESTERN CORP: Moody's Reviews Ba1 Rating and May Upgrade
-------------------------------------------------------------
Moody's Investors Service placed NorthWestern Corporation's Ba1
senior secured debt issues under review for possible upgrade.  The
action affects five issues that are secured by first mortgage
bonds.  NorthWestern's Ba1 Corporate Family Rating, its senior
unsecured bank credit facility rated Ba2, and its SGL-2
Speculative Grade Liquidity Rating are unaffected.

The review reflects improving financial performance and
reduced business risk that results from a narrowed focus on
core regulated utility operations since the company's emergence
from bankruptcy in October 2004.  The improving financial
performance reflects effective cost control, significant debt
reduction and refinancing of higher cost debt.  Although
NorthWestern still faces some unfinished challenges relating to
energy supply, a regulatory rate review in Montana, class action
lawsuits, and an investigation by the Securities and Exchange
Commission, the company has made enough progress to temper the
level of our concerns about these challenges.

The review considers a pending purchase and sale agreement under
which Babcock & Brown Infrastructure would acquire all of
NorthWestern's common stock.  The review for possible upgrade
incorporates the expectation that state utility regulators will
condition merger approval upon a financing structure that does not
place additional debt at NorthWestern and that the structure of
new holding company debt will not result in an excessive level of
parent company leverage or stressful demands upon NorthWestern for
upstream dividends.  The debt secured by first mortgage bonds is
considered to be better protected from the adverse effects of
incremental acquisition related debt at a newly created parent
holding company, while unsecured bank debt could be less
protected.

After factoring in Moody's standard adjustments, NorthWestern's
adjusted debt to capital ratio has improved to 56% at June 30,
2006, compared to 77% at Dec. 31, 2005.  NorthWestern's ratio of
funds from operations to debt has improved to 18% for the trailing
12-months ended June 30, 2006, which is almost twice the level
reported for the year ended Dec. 31, 2004.  The ability to sustain
these ratios at current levels would be consistent with a higher
rating.

NorthWestern Corporation, headquartered in Sioux Falls, South
Dakota, conducts regulated electric and gas utility operations in
Montana, South Dakota, and Nebraska through its NorthWestern
Energy division.  The company also has limited non-regulated
business investments.


NOVASITE PHARMA: Agent Selling Collateral on August 31 in Boston
----------------------------------------------------------------
Advent Healthcare and Life Sciences 111-A Limited Partnership, as
agent for Novasite Pharmaceuticals Inc., will be selling all of
Novasite's property subject to the Advent Healthcare's security
interests and liens.

The public sale will take place on Aug. 31, 2006, 10:00 a.m.
Eastern Time, at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C. at One Financial Center, in Boston, Massachusetts.

Novasite is entitled to an accounting of the unpaid indebtedness
secured by the property that the Agent intends to sell.  

For additional information regarding the sale, contact:

      Counsel to Agent
      Christopher J. Lhuller, Esq.
      Tel. No. (617) 348-3032

Headquartered in San Diego, California, Novasite Pharmaceuticals,
Inc. -- http://www.novasite.com/-- is a drug discovery and  
development company with a pipeline focused on diseases of the
central nervous system and other areas of unmet medical need.


NVF CO: Final Cash Collateral Hearing Set for September 21
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware will
convene a hearing at 10:30 a.m. on Sept. 21, 2006, for final
consideration of NVF Company and its debtor-affiliates' request to
use proceeds from the sale of their Wilmington property to the
extent the proceeds consist cash collateral of New Castle County.

The Debtor's interim authority to use New Castle's cash collateral
ended yesterday, and a second interim hearing on the continued use
of the sale proceeds is scheduled at 11:30 today.

                            Asset Sale

A significant portion of the Debtors' restructuring plan hinges on
a proposed agreement with Suddekor LLC, pursuant to which NVF will
manufacture a new vulcanized fiber product known as the "Yorkite
Veneer" which Suddekor will distribute.

In line with this plan, the Debtors restarted operations at its
facilities in Yorklyn, Delaware.  The Yorklyn facility houses the
Debtors' headquarters and main manufacturing operations.

In anticipation of the eventual replacement of its traditional
products with the "Yorkite Veneer," the Debtor plans to liquidate
its remaining facilities in Kennett Square, Pennsylvania,
Wilmington, Delaware and Holyoke, Massachusetts.

On July 26, the Court authorized the Debtors to sell their
Wilmington facility to Reybold Venture Group XXVI, LLC.  Reybold
has asked the Debtors to repair the windows at the Wilmington
facility as well as remove certain personal property.   The Debtor
estimates the cost of repair and removal at $150,000.  Reybold has
agreed to close on the sale on the condition that the Debtors
escrow approximately $450,000 pending completion of repairs.

The Debtors need to use cash collateral to perform the necessary
repairs and the removal of the personal property.  

                          New Castle Lien

New Castle objected to the Debtors' proposed use of the sale
proceeds on the grounds that it constitutes part of its cash
collateral.

New Castle asserts a $3 million lien on the Debtors' Yorklyn
property on account of unpaid sewer charges.  New Castle claims
that its liens extend to the Wilmington property, and because of
this, it is entitled to partial payment of its secured claim.

Based in Yorklyn, Delaware, NVF Company -- http://www.nvf.com/--   
manufactures thermoset composites (glass, Kevlar), vulcanized
fiber, custom containers, circuitry materials, custom fabrication,
and welding products.  The Company along with its wholly owned
subsidiary, Parsons Paper Company, Inc., filed for chapter 11
protection on June 20, 2005 (Bankr. D. Del. Case Nos. 05-11727 and
05-11728).  Rebecca L. Booth, Esq., at Richards, Layton & Finger,
P.A., represents the Debtors in their restructuring efforts.
Elizabeth A. Wilburn, Esq., and Jason W. Staib, Esq., at Blank
Rome LLP represent the Official Committee of Unsecured Creditors.  
When the Debtors filed for protection from their creditors, they
listed estimated assets between $10 million to $50 million and
estimated debts of more than $100 million.


ORIGEN FINANCIAL: Fitch Affirms Two Cert. Classes' Junk Ratings
---------------------------------------------------------------
Fitch Ratings affirmed these Origen Financial, Inc. manufactured
housing contracts:

  Series 2001-A:

    -- Class A-4 at 'AAA'
    -- Class A-5 at 'A+'
    -- Class A-6 at 'BBB-'
    -- Class A-7 at 'BBB-'
    -- Class M-1 at 'C/DR4'
    -- Class M-2 at 'C/DR6'

The affirmations, affecting approximately $63.3 million of the
outstanding certificates, are taken as a result of stable
collateral performance.  Over the past year, the net loss rate and
loss severity have remained relatively stable, while the
repossessions in inventory have declined from 3.7% to 1.7% of the
current collateral balance.

Cumulative losses of over 22.9% of the original collateral balance
have caused $6.2 million in write-downs to class M-2 and
completely deteriorated class M-1 and the overcollateralization.

Series 2001-A has an II-PP structure (Interest-Interest/Principal-
Principal), which pays interest to all classes before paying
principal to the senior classes.  In addition, the senior classes
will receive principal in sequential order.  Fitch deems those
senior classes which are expected to pay-off sooner to be of lower
credit risk than those which will be outstanding for a longer
period of time.

Origen, formerly named Dynex Financial, is a real estate
investment trust based in Southfield, Michigan, with significant
operations in Ft. Worth, Texas.  Origen is a national consumer
manufactured home lender and servicer.


PERFORMANCE TRANSPORTATION: Elects to Assume 22 Property Leases
---------------------------------------------------------------
Performance Transportation Services, Inc., and its debtor-
affiliates seek authority from the U.S. Bankruptcy Court for the
Western District of New York to assume 22 unexpired non-
residential real property leases with:

       (1) JF Barton;
       (2) Union Pacific Railroad;
       (3) SP&E, LLC;
       (4) Nichols Enterprises, Inc.;
       (5) Armand Cerrone, Inc.;
       (6) General Motors Corp.;
       (7) D.C.A.R., Inc.;
       (8) Equity Industrial Partners Corp.;
       (9) Volkswagen of America;
      (10) CSX Transportation;
      (11) Northeast Vehicle Services, LLC;
      (12) Staubach Global Services;
      (13) Ford Motor Land Services Corp.;
      (14) Union Pacific;
      (15) Furnkas Properties, LLC;
      (16) Metprop, LLC; and
      (17) Senatore & Procopio

The Debtors also ask the Court to fix the cure amounts for the
Leases at $0, except as to their contracts with:

                                   Proposed
      Counterparty               Cure Amount
      ------------               -----------
      Armand Cerrone                $6,173
      CSX Transportation             1,175
      Northeast Vehicle                714
      Senatore & Procopio            6,160

The Leases, according to Garry M. Graber, Esq., at Hodgson Russ
LLP, in Buffalo, New York, pertain to property in which the
Debtors conduct activities necessary to the operation of their
vehicle distribution business:

     * 19 leases relate to vehicle distribution facilities;

     * The Senatore & Procopio lease relates to a maintenance
       facility;

     * The Furnkas lease relates to an equipment parking lot; and

     * The Metprop leases relates to a parking lot.

The properties leased under the Leases are strategically located
near certain distribution points at which the Debtors receive
vehicles from their customers and, subsequently, load the
vehicles onto their vehicle carrier tractor-trailer units for
transport to certain designated vehicle dealerships.  Under the
Leases, the Debtors pay rent at rates that are at or below the
market rate for leased properties of similar size.

If the Debtors fail to assume the Leases, they could incur
substantial expense in addition to the possible shutdown of a
portion of their business operations if forced to find
alternative locations, Mr. Garber tells Judge Kaplan.

If the Leases will not be assumed or if the Debtors fail to
obtain the counterparties' consent to extend the time to assume
or reject the Leases, Mr. Graber says it is possible that the
Leases will be automatically rejected by operation of Section
365(d)(4) of the Bankruptcy Code on Aug. 23, 2006.

                        About Performance

Headquartered in Wayne, Michigan, Performance Transportation
Services, Inc. -- http://www.pts-inc.biz/-- is the second largest        
transporter of new automobiles, sport-utility vehicles and light
trucks in North America.  The Company provides transit stability,
cargo damage elimination and proactive customer relations that are
second to none in the finished vehicle market segment.  The
company's chapter 11 case is administered jointly under Leaseway
Motorcar Transport Company.

Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A.
Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq.,
at Hodgson Russ LLP represent the Debtors in their restructuring
efforts.  David Neier, Esq., at Winston & Strawn LLP, represents
the Official Committee of Unsecured Creditors.  When the Debtors
filed for protection from their creditors, they estimated assets
between $10 million and $50 million and more than $100 million in
debts.  (Performance Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or    
215/945-7000)


PERFORMANCE TRANSPORTATION: Extends Firestone Contract to 2009
--------------------------------------------------------------
Performance Transportation Services, Inc., and its debtor-
affiliates seek authority from the U.S. Bankruptcy Court for the
Southern District of New York to assume a modified supply contract
with Bridgestone/Firestone, Inc.

Firestone has provided the Debtors with specialized tires for the
last ten years.  The parties' lease agreement allows Firestone to
terminate the contract at the end of 2006 by providing 60 days'
prior notice.

Garry M. Graber, Esq., at Hodgson Russ LLP, in Buffalo, New York,
relates that the Debtors have conducted discussions with Firestone
and certain other tire suppliers.  As a result, the Debtors
decided to enter into an addendum to the Firestone Contract to
extend its term through Dec. 31, 2009.

The Debtors believe that assumption of the Contract, as modified
by the Addendum, will ensure that they receive the proper amount
of tires necessary for their continued operations.

Mr. Graber notes that Firestone, along with other tire suppliers,
determine the quantity of tires that they will produce months
prior to when those are actually delivered to their customers.  

Thus, the Debtors are motivated to now assume the modified
Contract to ensure their future need for tires will be included in
Firestone's production forecast.

The Debtors will pay Firestone $199,926 representing unpaid
prepetition fees, in exchange for Firestone's agreement to execute
the Addendum.  Mr. Garber says failure to pay the prepetition
amount will cause Firestone to terminate the Contract and decline
to supply tires to the Debtors in the future.

The Debtors estimate that assuming the Contract, as modified,
rather than entering into an agreement with any other supplier
provides them with approximately $102,000 of annual cost savings.  

Additionally, assuming the Contract avoids the significant
disruption to the Debtors' vehicle-hauling business that will
occur if the Contract is terminated and the Debtors are compelled
to replace all of the leased tires.

                      About Performance

Headquartered in Wayne, Michigan, Performance Transportation
Services, Inc. -- http://www.pts-inc.biz/-- is the second largest        
transporter of new automobiles, sport-utility vehicles and light
trucks in North America.  The Company provides transit stability,
cargo damage elimination and proactive customer relations that are
second to none in the finished vehicle market segment.  The
company's chapter 11 case is administered jointly under Leaseway
Motorcar Transport Company.

Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A.
Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq.,
at Hodgson Russ LLP represent the Debtors in their restructuring
efforts.  David Neier, Esq., at Winston & Strawn LLP, represents
the Official Committee of Unsecured Creditors.  When the Debtors
filed for protection from their creditors, they estimated assets
between $10 million and $50 million and more than $100 million in
debts.  (Performance Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or    
215/945-7000)


PIERRE FOODS: Clovervale Purchase Won't Affect Moody's B1 Rating
----------------------------------------------------------------
Moody's Investor Service commented on Pierre Foods Inc.'s B1
corporate family rating and stable outlook are not impacted by the
announcement that the Company has agreed to acquire Clovervale
Farms, Inc. and certain of the real property used in the business
for $22.8 million.

Clovervale Farms generated sales and EBITDA of about $26 million
and $3 million, respectively, for the LTM period ending April 30,
2006.  The transaction will increase Pierre's presence within its
existing channels, add needed capacity, and improve distribution
efficiency.  The transaction will be financed with a portion of a
$24 million add-on to Pierre's existing Term Loan B, which had
$107 million outstanding as of June 30, 2006.  The remaining
portion of the add-on will be used to pay transactions fees
and expenses.

Moody's noted that Pierre's credit ratios will not be materially
weakened by the transaction.  The Company's earnings and cash flow
have been solid, allowing for significant debt reduction since the
Company was purchased by Madison Dearborn Partners and certain
members of Pierre's management on June 30, 2004.  Since that time,
the Company has reduced its Term Loan B by about $43 million, to
$107 at the end of June 2006.  Leverage has improved to 4.3x from
5.3x at the end of fiscal year 2005.  On a proforma basis, the
acquisition will increase leverage to about 4.6x.

Pierre's ratings remain limited by its modest size, highly
competitive industry, sales concentration with CKE Restaurants,
and leverage.  Ratings are supported by its sales diversity across
channels, its continuing solid organic growth, and its success at
expanding operations into new food categories and channels.

The stable ratings outlook reflects Moody's expectation that
Pierre will maintain solid operating performance and manage its
growth so as to maintain debt protection measures within a range
consistent with its rating.  Moody's will continue to monitor the
profitability of its business with larger customers, and the
impact of planned capital expansion on financial flexibility.  The
ratings could be pressured if earnings were to materially weaken,
or if debt were to materially increase, such that leverage would
exceed 5x.  Ratings could be upgraded over time if Pierre were to
successfully diversify its sales to other national customers
beyond CKE, demonstrate a track record of maintaining and growing
sales to other major customers, materially reduce debt reduction
and sustain leverage improvement.

Pierre, a manufacturer and marketer of high-quality,
differentiated processed food solutions, focusing on formed,
pre-cooked protein products and hand-held convenience sandwiches,
had revenues of $430 million in the LTM period ending June 3,
2006.  The Company's headquarters are in Cincinnati, Ohio.


PILGRIM'S PRIDE: Unsolicited Gold Bid Cues S&P's Negative Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB' corporate
credit rating and other ratings on Pilgrim's Pride Corp. on
CreditWatch with negative implications following the company's
unsolicited bid for Gold Kist Inc.

At the same time, ratings on Gold Kist, including the 'B+'
corporate credit rating, were placed on CreditWatch with positive
implications.  About $571 million (including capitalized operating
leases) of debt of Pittsburg, Texas-based Pilgrim's Pride and
about $190 million (including capitalized operating leases) of
Atlanta, Georgia-based Gold Kist's debt is affected.

The ratings of both companies were placed on CreditWatch following
Pilgrim's Pride announcement of its unsolicited proposal to
acquire Gold Kist for $20.00 per share in cash.  This would value
the transaction at about $1 billion plus the assumption of Gold
Kist's debt.  Pilgrim's Pride anticipates that it could realize
cost synergies of $50 million.

The two companies have been in discussions since February 2006;
however, Gold Kist's board of directors has rejected Pilgrim's
Pride previous proposals.  Although Gold Kist's board of directors
will review this newest proposal, the company has thus far been
resolute about its strategy of remaining an independent company.

"If Gold Kist should take defensive actions, which would suggest a
more aggressive financial policy, we would likely revise the
CreditWatch implications for Gold Kist to developing from
positive," noted Standard & Poor's credit analyst Jayne Ross.

Standard & Poor's will continue to monitor the situation and take
appropriate rating action as needed.  The ratings on both
companies could be affirmed if the transaction is not completed.
If the deal does go through, the ratings on Pilgrim Pride could be
lowered (depending on how the transaction is financed) or
affirmed.  Ratings on Gold Kist could be raised or affirmed
(depending on how the transaction is financed).

Pilgrim's Pride is the second-largest poultry producer in the
U.S., with about a 16% market share, and Gold Kist is the third-
largest poultry producer, with about a 9% share.


PLASTECH ENGINEERED: Ford's Production Cut Cues S&P's Neg. Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed Plastech Engineered
Products Inc.'s rating on CreditWatch with negative implications.  
The CreditWatch placements reflect Standard & Poor's decision to
review the company's rating in light of Ford Motor Co.'s
announcement that it will sharply lower its North American
production in the second half of 2006, with the largest cuts
coming in the fourth quarter.

Ford's production of light trucks in the fourth quarter will be
down 155,000 units, or 28%, versus fourth-quarter 2005 production.
These cuts will adversely affect on several fronts those suppliers
with substantial Ford exposure.

Fourth-quarter cash flow and liquidity will likely be reduced from
previous expectations, perhaps significantly.  The magnitude of
the reduction in liquidity will depend on other calls on cash in
the quarter, availability under existing bank facilities, and any
mitigating actions, although such offsets within the quarter may
be limited.

The long-term effect on supplier ratings will depend on Ford's
ability to stem its market share losses, which will drive 2007
production levels.  Ford's very dramatic fourth-quarter production
cuts may turn out to be an alternative to lesser cuts extending
over several quarters into 2007.  But the negative effect on cash
flow and liquidity in the fourth quarter will increase challenges
for certain suppliers in 2007, regardless of whether more stable
production levels occur in 2007.

Standard & Poor's will assess the effect of Ford's announcement in
light of the other business challenges facing Plastech Engineered
Products Inc.  Standard & Poor's expects to conclude its reviews
within the next two months.

Rating Placed on Creditwatch With Negative Implication:

  * Plastech Engineered Products Inc.: to B+/Watch Neg/-- from   
    B+/Negative/--


POE FINANCIAL: Case Summary & 30 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: Poe Financial Group, Inc.
             Two Harbour Place
             302 Knights Run Avenue, Suite 700
             Tampa, Florida 33602
             
Bankruptcy Case No.: 06-04288

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Poe Insurance Managers, LLC                06-04292
      Poe & Associates, LLC                      06-04294
      Mariah Claims Services, LLC                06-04296

Type of Business: The Debtors specialize in insuring coastal
                  properties assumed from Florida's high-risk
                  insurance pool.

                  Poe Financial Group is the parent company.
                  Poe Insurance acts as a managing general
                  agency, Mariah Claims is a claims service
                  provider, and Poe & Associates is an
                  independent retail insurance agency.

                  See http://www.poefinancialgroup.com/

Chapter 11 Petition Date: August 18, 2006

Court: Middle District of Florida (Tampa)

Judge: Catherine Peek McEwen

Debtors' Counsel: Noel R. Boeke, Esq.
                  Leonard Gilbert, Esq.
                  Rod Anderson, Esq.
                  Holland & Knight, LLP
                  100 North Tampa Street, Suite 4100
                  Tampa, Florida 33601
                  Tel: (813) 227-8500
                  Fax: (813) 229-0134

                         Estimated Assets     Estimated Debts
                         ----------------     ---------------
Poe Financial Group,     $50,000 to $100,000  $10 Million to
Inc.                                          $50 Million

Poe Insurance Managers   $10 Million to       $10 Million to
LLC                      $50 Million          $50 Million

Poe & Associates, LLC    $500,000 to          $500,000 to
                         $1 Million           $1 Million

Mariah Claims Services,  $50,000 to $100,000  $50,000 to $100,000
LLC

A. Poe Financial Group, Inc.'s Largest Unsecured Creditor:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Poe Insurance Managers, LLC   Loan                   $22,260,924
302 Knights Run Avenue
Suite 700
Tampa, FL 33602


B. Poe Insurance Managers, LLC's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Nuvox Communications          Trade Payable              $51,148
P.O. Box 580451
Charlotte, NC 28258-0451

Insurance Solution of         AgentChkOS                 $28,992
Coral Springs
1750 North University Drive
Suite 218
Coral Springs, FL 33071

Plastridge Agency, Inc. -     AgentChkOS                 $18,095
Coral Springs
9660 West Sample Road, #103
Coral Springs, FL 33065

Hooper Hayes & Rogan          AgentChkOS                  $9,042

Wyman Green & Blalock Inc/    AgentChkOS                  $7,193
Alliance

Elaine Jennings Ins. Agency   AgentChkOS                  $7,103

The Beacon Group, Inc.        AgentChkOS                  $6,756

Hilb Rogal & Hobbs of         AgentChkOS                  $6,162
Sarasota

Peak 10 Inc.                  Trade Payable               $5,923

Ikon Office Solutions         Trade Payable               $4,838

Reyes, Alexander              CustrtnPrem                 $4,588

Avery & Assoc. Inc.           AgentChkOS                  $4,298

Working, Julie                CustrtnPrem                 $4,234

Lieb, Bruce                   CustrtnPrem                 $4,198

Moore, Loretta                CustrtnPrem                 $4,115

Compass Consulting, LLC       Trade Payable               $4,000

Exceptional Ins. Agency,      AgentChkOS                  $3,976
Inc.

Fernandez, Max                CustrtnPrem                 $3,893

Moody Insurance Group         AgentChkOS                  $3,683

Zolnowski, Teresa             CustrtnPrem                 $3,621


C. Poe & Associates, LLC's 5 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Telecom Solutions, Inc.       Trade Payable                 $642
715 West US Highway 92
Seffner, FL 33584-3513

Central Insurance School      Trade Payable                 $485
13246 38th Street North
Clearwater, FL 33762

Mall Office Products          Trade Payable                 $135
200 North Tampa Street #115
Tampa, FL 33602

Carter Printing Company       Trade Payable                  $42
1723 West Kennedy Boulevard
Tampa, FL 33606

Print Source                  Trade Payable                  $14
P.O. Box 8445
Tampa, FL 33674

D. Mariah Claims Services, LLC's 4 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Language Line Services        Trade Debt                  $1,334
P.O. Box 16012
Monterey, CA 93942

Abbey, Adams, Byelick,        Trade Debt                    $735
Kiernan
P.O. Box 1511
St. Petersburg, FL 33731

Telecom Solutions, Inc.       Trade Debt                    $100
715 West US Highway 92
Seffner, FL 33584-3513

Mall Office Products          Trade Debt                     $78
200 North Tampa Street
Suite 115
Tampa, FL 33602


POPULAR CLUB: Section 341(a) Meeting Schedules on September 13
--------------------------------------------------------------
The U.S. Trustee for Region 3 will convene a meeting of Popular
Club Plan Inc.'s creditors at 9:00 a.m., on Sept. 13, 2006, at the
Office of the US Trustee, Raymond Boulevard, One Newark Center,
Suite 1401 in Newark, New Jersey.  This is the first meeting of
creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy
cases.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Headquartered in Garfield, New Jersey, Popular Club Plan, Inc., is
a catalog retailer.  The Company filed for chapter 11 protection
on Aug. 4, 2006 (Bankr. D. N.J. Case No. 06-17231).  Barry W.
Frost, Esq., at Teich Groh, represents the Debtor.  When the
Debtor filed for protection from its creditors, it listed total
assets of $10,740,500 and total debts of $5,496,884.


POWERCOLD CORP: Balance Sheet Upside-Down by $3.89 Mil. at June 30
------------------------------------------------------------------
PoweCold Corp. incurred a $1,027,816 net loss on $374,441 of
revenues for the second quarter ending June 31, 2006, the Company
disclosed on a Form 10-Q filing delivered to the Securities and
Exchange Commission on Aug. 11, 2006.

As of June 30, 2006, the Company's balance showed $1,336,347 in
assets and $5,229,198 in debts.  The Company's equity deficit
narrowed to $3,892,852 on June 30, 2006, from a $4,534,654 deficit
at Dec. 31, 2005.

                       Going Concern Doubt

As reported in the Troubled Company Reporter on May 18, 2006,
Williams & Webster, P.S., expressed substantial doubt about
PowerCold Corporation's ability to continue as a going concern
after it audited the company's financial statements for the year
ended Dec. 31, 2005.  The auditing firm pointed to the company's
substantial operating losses and accumulated deficit.  The
auditing firm also noted that the company's intangible assets
comprise a material portion of their assets.

A full-text copy of the regulatory filing is available for free at
http://ResearchArchives.com/t/s?1026

PowerCold Corporation -- http://www.powercold.com/-- designs,   
develops and markets unique HVAC products and systems for
commercial use.  The company derives its revenues from two
principal product line applications.  The first is a line of
proprietary energy efficient products, including evaporative
condensers and fluid coolers for the HVAC industry.  The second is
a proprietary four pipe integrated piping system for large
commercial buildings that reduces power costs by up to 50% for air
conditioning and refrigeration systems and provides a clean
comfort air environment.


RENATA RESORT: First Amended Plan Proposes Liquidation of Assets
----------------------------------------------------------------
In a disclosure statement explaining its first amended plan of
reorganization, Renata Resort LLC, fdba Sunset Pier Resort LLC,
tells the U.S. Bankruptcy Court for the Northern District of
Florida that it intends to liquidate its assets, wind up its
affairs, and pay the allowed claims of legitimate holders to the
extent possible.

The Debtor amended its Plan after Partners Property Corporation
cancelled its purchase of two parcels of the Debtor's real
property in Bay County, Florida.

In the alternative, the Debtor proposes to sell the two parcels
of the Florida property and some of its other assets to Renata KT,
L.P.

                       Treatment of Claims

Under the Amended Plan, holders of General Unsecured Claims,
Unsecured Claims Arising from Rejected Executory Contracts or
Unexpired Leases, and Capital Contribution Claims by the Debtor's
members, will receive the full amount of their allowed claim.

Treatment of Sylvia Harrison's $6,360,000 claim will be determined
by the Bankruptcy Court and state court.

Equity Interest Holders will retain their existing equity
interests in the Debtor, but will receive no distributions under
the Plan on account of their interests until all Plan payments are
paid.

A full-text copy of the Debtor's disclosure statement explaining
its first amended plan of reorganization is available for a fee
at:

   http://www.researcharchives.com/bin/download?id=060823213227

Headquartered in Panama City, Florida, Renata Resort, LLC, fdba
Sunset Pier Resort, LLC, operates a hotel and resort.  The company
filed for chapter 11 protection on May 31, 2006 (Bankr. N.D. Fla.
Case No. 06-50114).  John E. Venn, Jr., Esq., at John E. Venn,
Jr., P.A., represents the Debtor in its restrucutring efforts.  No
Official Committee of Unsecured Creditors has been appointed in
the Debtor's case.  When the Debtor filed for protection from its
creditors, it listed total assets of $19,947,271 and total debts
of $8,524,196.


RIGEL CORP: Judge Baum Converts Case to Chapter 7 Liquidation
-------------------------------------------------------------
The Hon. Redfield T. Baum, Sr., of the U.S. Bankruptcy Court for
the District of Arizona converted Rigel Corporation's chapter 11
case to a chapter 7 liquidation proceeding.

The Debtor had asked the Court to convert its case pursuant to
Section 1112(a) of Title 11 of the U.S. Code.

The Court appointed Anthony H. Mason to serve as the Debtor's
chapter 7 trustee.

Headquartered in Tempe, Arizona, Rigel Corporation, is a Krispy
Kreme franchisee.  The Company also operates Godfather's Pizza,
KFC and Bruegger's Bagels' franchises.  The Company filed for
chapter 11 protection on Aug. 9, 2006 (Bankr. D. Ariz. Case NO.
06-02480).  Michael W. Carmel, Esq., at Michael W. Carmel, Ltd.,
represents the Debtor.  When the Debtor filed for protection from
its creditors, it estimated assets and debts between $10 million
and $50 million.


RIGEL CORP: Chapter 7 Trustee Hires Allen & Sala as Counsel
-----------------------------------------------------------
Anthony H. Mason, the Chapter 7 Trustee overseeing the liquidation
of Rigel Corporation, obtained authority from the U.S. Bankruptcy
Court for the District of Arizona to employ Allen & Sala, P.L.C.,
as his bankruptcy counsel.

Allen & Sala is expected to:

    a) give the Trustee legal advice with respect to his powers
       and duties as Trustee;

    b) represent the Trustee in connection with negotiations
       involving secured and unsecured creditors and the Debtor;

    c) prepare applications, motions, answers, orders, reports or
       other legal papers necessary to locate and obtain assets of
       the Debtor for the benefit of the estate's creditors; and

    d) perform all legal services the Trustee requires in order to
       locate and obtain assets on behalf of the estate's
       creditors.

The Trustee tells the Court that the firm's professionals bill:

    Professional                     Designation     Hourly Rate
    ------------                     -----------     -----------
    Thomas H. Allen, Esq.            Member             $225
    Paul Sala, Esq.                  Member             $225
    Dawn M. Bayne, Esq.              Associate          $175
    Kevin C. McCoy, Esq.             Associate          $175
    Leslie R. Hendrix, Esq.          Associate          $140

    Legal Assistants and Law Clerks                      $95

To the best of the Trustee's knowledge, the firm is disinterested
as that term is defined in Sectiom 101(14) of the Bankruptcy.

Headquartered in Tempe, Arizona, Rigel Corporation, is a Krispy
Kreme franchisee.  The Company also operates Godfather's Pizza,
KFC and Bruegger's Bagels' franchises.  The Company filed for
chapter 11 protection on Aug. 9, 2006 (Bankr. D. Ariz. Case NO.
06-02480).  Michael W. Carmel, Esq., at Michael W. Carmel, Ltd.,
represents the Debtor.  When the Debtor filed for protection from
its creditors, it estimated assets and debts between $10 million
and $50 million.


ROUGE INDUSTRIES: Court Approves $50-Million Ford Settlement
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approves
the settlement agreement among Rouge Industries, Inc., and its
debtor-affiliates, the Official Committee of Unsecured Creditors,
and Ford Motor Corp. resolving Ford's adversary case against the
Debtors.

                      The Divorce from Ford

Rouge Steel first operated as a division of Ford and then later as
a subsidiary.  In 1998, Marico Acquisition Corp. acquired all of
the issued and outstanding stock of Rouge Steel from Ford pursuant
to a Stock Purchase and Sale Agreement between Marico and Ford.  
The Rouge Steel Purchase Agreement provides that Ford remained
liable for certain liabilities including environmental claims
existing or occurring on or prior to the closing of the Rouge
Sale.  The Rouge Steel Purchase Agreement further provides that in
the event Ford fails to comply with the Ford Environmental
Obligation, Rouge Steel's sole remedy is indemnification from
Ford.

As part of the Rouge Sale, Ford entered into an agreement with the
International Union, United Automobile, Aerospace and Agriculture
Implement Workers of America, which was in addition to the
collective bargaining agreement in effect between UAW and Ford at
that time.  Under the UAW Agreement, Ford agreed that bumping
obligations -- that some Rouge Steel hourly employees would be
allowed to return to Ford to work in one of Ford's local plants if
they lost their jobs at Rouge Steel due to a layoff of unknown
duration, an permanent discontinuance of operations by Rouge Steel
or a sale of Rouge Steel's assets.   

Following the Rouge Sale, Ford remained involved in the Debtors'
business operations, including the representation, during the most
relevant time periods, of two of seven seats on Rouge Industries
and Rouge Steel's boards of directors.  The Ford plant and the
Rouge Steel plant, both located in Dearborn, Michigan, are
physically contiguous.  Even after the rouge Sale, Ford and Rouge
Steel shared facilities and services related to their plants and
business operations.  Ford also owned Rouge Steel's main office
buildings and leased the premises to Rouge Steel.  Following the
Rouge Sale, Ford remained Rouge Steel's largest customer.  In
2002, Ford accounted for 40% of Rouge Steel's business and Rouge
Steel produced 20% of Ford's steel requirements.  The Debtors
believe that based on the parties' historical relationship, Ford's
seats on the board of directors, and the economic relationship
between them, Ford's relationship with the Debtors exceeded the
ordinary debtor-creditor relationship.  

In connection with the Rouge Sale, Rouge Steel and Ford entered
into a Powerhouse Joint Operating Agreement on Dec. 15, 1989.  The
Powerhouse Agreement provided a framework regarding the parties'
obligations with respect to an individual complex in Dearborn,
Michigan.  Rouge Steel and Ford owned the Industrial Complex as
60%-40% joint tenants.  The Industrial complex was the site of
certain facilities including a powerhouse, electric distribution
lines, and other facilities used to distribute electricy, steam,
compressed air and water required for both Rouge Steel's and
Ford's manufacturing processes.

Ford was the sole operator of the Powerhouse.  Ford was required
to operate the facilities with its own employees, in a clean and
safe manner, performing and recording periodic operational checks
and tests of equipment.  Additionally, Ford, pursuant to the
Powerhouse Agreement, agreed to indemnify Rouge Steel against any
loss arising out of Ford's operation of the Powerhouse and its
performance under the Powerhouse Agreement.  

           The Powerhouse Explosion and Fining of Ford

On Feb. 1, 1999, a boiler at the powerhouse exploded while it was
being shut down by Ford employees for its annual inspection,
resulting in six deaths and 38 injuries.  The Dearborn Fire
Department blamed the deadly incident on Ford's failure to operate
the Powerhouse in a safe and workmanlike manner.  The incident had
a devastating effect on the Debtors' ability to produce steel.  
The Debtors suffered hundreds of millions of dollars in damages
relating to the business interruption.  In addition, the Debtors
faced, and are still facing, hundreds of million of dollars in
personal injury litigation from employees who allegedly were
injured in the incident.   

By Nov. 2001, the Debtors were facing severe financial
difficulties, primarily due to the effects of the Powerhouse
Explosion and related litigation and a general downturn in the
Debtors' businesses at that time.  During this time period, Ford
worked with the Debtors to develop a restructuring strategy and
stressed its desire that the strategy not include the Debtors'
filing for chapter 11 protection.  

The Debtors assert that Ford used the Debtors' liquidity crisis as
leverage to resolve valuable claims against Ford arising out of
the Powerhouse Explosion, which claims included estimated
indemnification in excess of $100 million in connection with Ford
employee lawsuits and an estimated $60 million to $80 million in
Rouge Steel's uninsured business losses.  In addition, the Debtors
maintain that one of Ford's goals was to insulate itself from
around $400 million in obligations by preventing a Rouge Steel
chapter 11 proceeding that could include employee layoffs of
unknown duration, a permanent discontinuance of operations by
Rouge Steel or a sale of Rouge Steel's assets.  

The Debtors further contend that Ford was willing to make a
payment of $75 million to the Debtors only if the Debtors entered
into a separate confidential settlement agreement.  Ford styled
the payment as a loan, and under the Confidential Settlement
Agreement, the Debtors released its claims against Ford arising
from the Powerhouse Explosion.  

                    The Adversary Proceeding

Ford commenced an adversary case against the Debtors on June 15,
2005, seeking for declaratory judgment that:

   -- the Debtors defaulted under the Ford Agreement;
   -- the Debtors owe Ford around $75 million;
   -- Ford has first priority security interest in the Debtors'
      collateral.

The Debtors filed multiple counterclaims and affirmative defenses,
including:

   -- failure to file a proof of claim;
   -- fraudulent conveyance;
   -- recharacterization of the Ford payment as equity;
   -- deepening insolvency;
   -- equitable subordination; and
   -- $114,017,500 preference action.

The Committee was allowed to intervene in the proceeding.

                    The Settlement Agreement

After lengthy negotiations, the parties decided to resolve their
disputes.  Their Settlement Agreement provides that:

   (a) the Debtors will pay Ford $50 million to resolve all of
       Ford's claims against the Debtor's estates;

   (b) the parties will exchange mutual releases;

   (c) Ford and the Debtors will cooperate with one another with
       respect to the personal injury claims that arose due to the
       PowerHouse Explosion;

   (d) Ford will act consistent with its historical undertaking
       and its obligations under the Rouge Steel Purchase
       Agreement with respect to the Asbestos Claims.   

Headquartered in Dearborn, Michigan, Rouge Industries, Inc., an
integrated producer of flat-rolled steel, filed for chapter 11
protection on October 23, 2003 (Bankr. D. Del. Case No. 03-13272).  
Donna L. Harris, Esq., Robert J. Dehney, Esq., Eric D. Schwartz,
Esq., Gregory W. Werkheiser, Esq., and Alicia B. Davis, Esq., at
Morris, Nichols, Arsht & Tunnell represent the Debtors in their
restructuring efforts.  Kurt F. Gwynne, Esq., Claudia Z. Springer,
Esq., and Paul M. Singer, Esq., at Reed Smith LLP, serve as
counsel to the Official Committee of Unsecured Creditors.  When
the Debtors filed for protection from their creditors, they listed
$558,131,000 in total assets and $558,131,000 in total debts.  On
Dec. 19, 2003, the Court approved the sale of substantially all of
the Debtors' assets to SeverStal N.A. for $285.5 million.  The
Asset Sale closed on Jan. 30, 2005.


SAINT VINCENTS: Selling Health School to St. John's for $7.7 Mil.
-----------------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates seek authority from the U.S. Bankruptcy Court
for the Southern District of New York to sell:

    (a) a parcel of nonresidential real property and improvements
        located at 175-05 Horace Harding Expressway, Fresh
        Meadows, in New York; and

    (b) the business of the School of Allied Health Professions
        located at the premises, which consists of five programs:

          (i) a Physician's Assistant program,
         (ii) a Medical Technology program,
        (iii) a Radiography program,
         (iv) a Pathology Assistant program, and
          (v) an EMS Institute program.

The Debtors will sell the Assets to St. John's University, New
York, free and clear of any liens, claims, and encumbrances
pursuant to an asset purchase agreement, dated July 28, 2006.

Saint Vincent's Catholic Medical Centers leases the Premises from
Turnpike Gardens, Inc.  Pursuant to the Lease, SVCMC has the
option to purchase the Premises for $4,200,000, according to
Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in Boston,
Massachusetts.

Turnpike Gardens refused to convey the Premises to SVCMC,
prompting the Debtors to commence an adversary proceeding to
compel Turnpike Gardens to transfer the Premises to SVCMC in
exchange for payment of the Option Price, Mr. Troop relates.

To resolve the dispute and avoid the cost and delay of litigation,
SVCMC and Turnpike Gardens agreed on a settlement with respect the
Option Litigation.  Specifically, the parties agreed that Turnpike
Gardens will sell the Premises to SVCMC or SVCMC's designee, and
SVCMC will dismiss the Option Litigation with prejudice after the
sale.

After months of extensive marketing and arm's-length negotiations,
the Debtors accepted St. John's University's offer of $7,770,000
plus the assumption of certain liabilities, including accrued
vacation time for the employees whom St. John's University will
employ after the sale.

St. John's University placed $388,500 in escrow with Garfunkel,
Wild & Travis, P.C., special counsel to the Debtors, upon
execution of the APA.  St. John's will deposit an additional
$388,500 after the Court approves the Sale and the settlement of
the Option Litigation.

If SVCMC accepts another offer other than St. John's University,
SVCMC will pay St. John's a $300,000 break-up fee along with the
actual out-of-pocket expenses incurred, subject to a cap.

The APA may be terminated, among others, if the Sale doesn't close
by August 31, 2006.  But if the parties provide a timely written
notice, the Termination Date may be extended up to Jan. 4, 2007.  
The APA may also be terminated if the necessary regulatory
approvals are not obtained, the settlement of the Option
Litigation is not approved, the parties materially breach the
terms of the APA, and the parties mutually consent to the
termination.

Mr. Troop notes contends that a sale of the Business to St. John's
University would best provide a seamless transition for SVCMC's
students and faculty, and maximize value for the estate because
St. John's University:

    -- holds joint registration with SVCMC for the Physician's
       Assistant program, Medical Technology program, and
       Pathology Assistant program, and is thus, familiar with the
       curriculum, policies, and procedures for the programs;

    -- previously had preliminary discussions with the New York
       State Education Department regarding taking over the
       Business in the event that SVCMC decided to close it; and

    -- made the only offer for the Premises and the Business.

Moreover, Mr. Troop assures the Court that the Debtors have
received General Electric Capital Corporation's consent to sell
the Purchased Assets free and clear of GE Capital's lien.

A full-text copy of the Asset Purchase Agreement is available for
free at http://researcharchives.com/t/s?104e
    
                     Merola and GAIC Object

On Oct. 9, 2003, Patsy Merola, as administrator of the Estate of
Wanda Merola, obtained a $2,652,539 judgment from the New York
State Supreme Court, Queens County, for his action against
Catholic Medical Center of Brooklyn and Queens Inc.

Great American Insurance Company issued in favor of Mr. Merola an
"Undertaking on Appeal from a Judgment Directing the Payment of
Money."

Mr. Merola and GAIC oppose the sale motion because, among other
things, it fails to recognize the lien of the $2,652,537 Judgment.  
Mr. Merola and GAIC tell the Court that the sale motion
inaccurately asserts that the only lien on the Purchased Assets is
that held by GE Capital.  Mr. Merola and GAIC point out that the
Debtors are fully aware of the Merola Judgment Lien.  Mr. Merola
and GAIC raised the same issue in their objections to the Debtors'
other sale motions.  Mr. Merola and GAIC also note that the
Debtors have been actively attending Rule 2004 examinations
conducted by GAIC's counsel inquiring into the Debtors' assets
subject to the Merola Judgment.

Hence, Mr. Merola and GAIC assert that any order approving the
sale of Allied Health should provide that the proceeds:

    * are to be paid to Mr. Merola to the extent of his $2,652,537
      judgment lien; or

    * alternatively, be held by an accredited escrow agent in a
      segregated bank account to the extent of and subject to Mr.
      Merola's judgment lien, which will have a first priority to
      that fund.

Mr. Merola and GAIC add that at a minimum, any order approving
the sale of any real property in Queens owned by the Debtors,
should:

    -- contain provisions no less favorable to GAIC than those
       which were inserted in the order approving the sale of the
       Debtors' Queens hospitals to resolve Mr. Merola and
       GAIC's objections in relation to that sale; and

    -- preserve the position of Mr. Merola and GAIC to the effect
       that the lien of GE Capital is subordinate to Mr. Merola's
       judgment lien.

Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the  
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.  The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951).  Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases.  On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors.  As of Apr. 30, 2005,
the Debtors listed $972 million in total assets and $1 billion in
total debts.  (Saint Vincent Bankruptcy News, Issue No. 32
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


SATELITES MEXICANOS: Hires UBS Securities as Financial Advisors
---------------------------------------------------------------
The Honorable Robert D. Drain, of the U.S. Bankruptcy Court for
the Southern District of New York, authorized Satelites Mexicanos,
S.A. de C.V., to employ, on an interim basis, UBS Securities, LLC,
as its financial advisors, nunc pro tunc to Aug. 11, 2006.

UBS is intimately familiar with the Debtor's business and
financial affairs and thus is well qualified to provide financial
advisory services to the Debtor, Carmen Ochoa Avendano, Esq., the
Debtor's general counsel, says.  UBS, Ms. Avendano relates, has
been assisting the Debtor in its restructuring efforts since May
17, 2002, and has gained valuable knowledge of the Debtor, its
business operations, capital structure, strategic and financial
needs, and the negotiations with various creditor constituencies
leading to the filing of the Chapter 11 case.

As financial advisors, UBS will:

    (a) advise and assist the Debtor in analyzing, structuring and
        negotiating the financial aspects of a restructuring of
        its Senior Secured Floating Rate Notes due 2004 or 10.125%
        Senior Secured Notes due 2004, including, without
        limitation, any exchange, conversion, repurchase or
        repayment of any liabilities, or any modification,
        amendment, deferral, restructuring, recapitalization,
        rescheduling, moratorium, or adjustment of the terms or
        conditions of any liabilities;

    (b) provide the Debtor with financial and market-related
        advice and assistance with respect to a sale, merger or
        consolidation as may be appropriate and mutually agreed
        upon by the Debtor and UBS, which may include assisting
        the Debtor in analyzing, structuring, and negotiating the
        financial aspects of a Sale Transaction; and

    (c) provide other assistance and services as mutually agreed
        upon by the Debtor and UBS.

A Sale Transaction does not include:

     -- a transaction with Loral Space & Communications, Inc., or
        Principia S.A. de C.V. and their affiliates;

     -- the sale of one satellite, unless UBS was specifically
        directed by the Debtor to effect a satellite sale;

     -- the sale, transfer or other disposition of any obligations
        of Servicios Corporativos Satelitales, S.A. de C.V.;

     -- the exchange of the Debtor's existing debt for new
        securities; and

     -- the transfer or other disposition of the capital stock or
        assets pursuant to a lien or related agreement existing as
        of Nov. 15, 2005.

UBS will bill the Debtor:

    (1) a $150,000 monthly cash advisory fee;

    (2) a $1,250,000 Restructuring Transaction Fee when a
        Restructuring Transaction becomes binding on the creditors
        affected thereby and payable on the date of the closing of
        the Restructuring Transaction; and

    (3) a Sale Transaction Fee equal to 0.60% of the Transaction
        Value, payable at the closing of the Sale Transaction;

The Debtor will also reimburse UBS for all of its reasonable and
documented expenses, including reasonable and documented fees,
disbursements and other charges of its legal counsel, if any,
provided that legal fees do not exceed $100,000 without the
Debtor's consent.

As of its filing for chapter 11 protection, the Debtor had paid 10
Monthly Advisory Fees totaling $1,500,000 to UBS.  Of this amount,
$750,000, as well as 50% of any Monthly Advisory Fees paid after
its filing for chapter 11 protection, will be credited against the
first to occur of the Restructuring Transaction Fee or the Sale
Transaction Fee.

The Debtor will also indemnify UBS and certain related parties
under certain circumstances, provided that the loss or damage for
which UBS or the related party is seeking indemnification is not
finally determined to have resulted from UBS' or that related
person's gross negligence or willful misconduct.

The Debtor or UBS may terminate the Engagement Letter at any time
upon 15 days' prior written notice to the other party.  Upon
termination, UBS will be entitled to any fees earned prior to the
termination date and payable pursuant to the Engagement Letter.

However, if UBS elects to terminate its services, it will not be
entitled to the Monthly Advisory Fee for the last month of its
engagement.  If the Monthly Advisory Fee for the month has already
been paid, then UBS will refund the fee.

If, at any time on or prior to the expiration of six months after
the termination of the Engagement Letter, the Debtor consummates a
Restructuring Transaction or Sale Transaction or enters into an
agreement, or files or agrees to a plan, which subsequently
results in a Restructuring Transaction or Sale Transaction, UBS
will be entitled to payment of the Restructuring Transaction Fee
or the Sale Transaction Fee, as applicable, unless UBS was the
party that elected to terminate the Engagement Letter.

Termination of the Engagement Letter by either party will not
affect certain of the Debtor's obligations to UBS, including,
without limitation, its expense reimbursement, indemnification and
exculpation obligations under the Engagement Letter with respect
to activities occurring prior to the effective date of
termination.

Ms. Avendano discloses that, during the one-year period preceding
its filing for chapter 11 protection, the Debtor paid UBS
$1,882,500 for services rendered and $139,133 for expenses
incurred.

Steven D. Smith, a managing director of UBS Securities LLC,
assures the Court that his firm does not hold or represent any
other entity having an adverse interest in connection with the
Debtor's case.  Mr. Smith relates that UBS' trading desk holds for
its own account, as part of a legacy investment of a predecessor
entity, a $500 principal amount interest in a Satmex Existing
Bond, which represents a partial interest in that bond.
Nevertheless, Mr. Smith says, UBS is a "disinterested person," as
defined in Section 101(14) of the Bankruptcy Code as modified by
Section 1107(b).

                   About Satelites Mexicanos

Satelites Mexicanos, S.A. de C.V., provides fixed satellite
services in Mexico.  Satmex provides transponder capacity via its
satellites to customers for distribution of network and cable
television programming, direct-to-home television service, on-site
transmission of live news reports, sporting events and other video
feeds.  Satmex also provides satellite transmission capacity to
telecommunications service providers for public telephone networks
in Mexico and elsewhere and to corporate customers for their
private business networks with data, voice and video applications.  
Satmex also provides the government of the United Mexican States
with approximately 7% of its satellite capacity for national
security and public purposes without charge, under the terms of
the Orbital Concessions.

The Debtor filed for chapter 11 petition on August 11, 2006
(Bankr. S.D.N.Y. Case No. 06-11868).  Luc A. Despins, Esq., at
Milbank, Tweed Hadley & McCloy LLP represents the Debtor in the
U.S. Bankruptcy proceedings.  Attorneys from Galicia y Robles,
S.C., and Quijano Cortina Lopez y de la Torre give legal advice in
the Debtor's Mexican Bankrutpcy proceedings.  UBS Securities LLC
and Valor Consultores, S.A. de C.V., give financial advice to the
Debtor.  Steven Scheinman, Esq., Michael S. Stamer, Esq., and
Shuba Satyaprasad, Esq., at Akin Gump Strauss Hauer & Feld LLP
give legal advice to the Ad Hoc Existing Bondholders' Committee.
Dennis Jenkins, Esq., and George W. Shuster, Jr., Esq., at Wilmer
Cutler Pickering Hale and Dorr LLP give legal advice to Ad Hoc
Senior Secured Noteholders' Committee.  As of July 24, 2006, the
Debtor has $905,953,928 in total assets and $743,473,721 in total
liabilities.

On May 25, 2005, certain holders of Satmex's Existing Bonds and
Senior Secured Notes filed an involuntary chapter 11 petition
against the Company (Bankr. S.D.N.Y. Case No. 05-13862).
On June 29, 2005, Satmex filed a voluntary petition for a Mexican
reorganization, known as a Concurso Mercantil, which was assigned
to the Second Federal District Court for Civil Matters for the
Federal District in Mexico City.

On August 4, 2005, Satmex filed a petition, pursuant to Section
304 of the Bankruptcy Code to commence a case ancillary to the
Concurso Proceeding and a motion for injunctive relief seeking,
among other things, to enjoin actions against Satmex or its assets
(Bankr. S.D.N.Y. Case No. 05-16103).  (Satmex Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


SATELITES MEXICANOS: Section 341 Meeting Scheduled for Sept. 27
---------------------------------------------------------------
Diana G. Adams, the Acting United States Trustee for Region 2,
will convene a meeting of Satelites Mexicanos, S.A. de C.V.'s
creditors on Sept. 27, 2006, at 2:00 p.m., at 80 Broad St., 2nd
Floor, U.S. Trustee's 341 Meeting Room.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

                   About Satelites Mexicanos

Satelites Mexicanos, S.A. de C.V., provides fixed satellite
services in Mexico.  Satmex provides transponder capacity via its
satellites to customers for distribution of network and cable
television programming, direct-to-home television service, on-site
transmission of live news reports, sporting events and other video
feeds.  Satmex also provides satellite transmission capacity to
telecommunications service providers for public telephone networks
in Mexico and elsewhere and to corporate customers for their
private business networks with data, voice and video applications.  
Satmex also provides the government of the United Mexican States
with approximately 7% of its satellite capacity for national
security and public purposes without charge, under the terms of
the Orbital Concessions.

The Debtor filed for chapter 11 petition on August 11, 2006
(Bankr. S.D.N.Y. Case No. 06-11868).  Luc A. Despins, Esq., at
Milbank, Tweed Hadley & McCloy LLP represents the Debtor in the
U.S. Bankruptcy proceedings.  Attorneys from Galicia y Robles,
S.C., and Quijano Cortina Lopez y de la Torre give legal advice in
the Debtor's Mexican Bankrutpcy proceedings.  UBS Securities LLC
and Valor Consultores, S.A. de C.V., give financial advice to the
Debtor.  Steven Scheinman, Esq., Michael S. Stamer, Esq., and
Shuba Satyaprasad, Esq., at Akin Gump Strauss Hauer & Feld LLP
give legal advice to the Ad Hoc Existing Bondholders' Committee.
Dennis Jenkins, Esq., and George W. Shuster, Jr., Esq., at Wilmer
Cutler Pickering Hale and Dorr LLP give legal advice to Ad Hoc
Senior Secured Noteholders' Committee.  As of July 24, 2006, the
Debtor has $905,953,928 in total assets and $743,473,721 in total
liabilities.

On May 25, 2005, certain holders of Satmex's Existing Bonds and
Senior Secured Notes filed an involuntary chapter 11 petition
against the Company (Bankr. S.D.N.Y. Case No. 05-13862).
On June 29, 2005, Satmex filed a voluntary petition for a Mexican
reorganization, known as a Concurso Mercantil, which was assigned
to the Second Federal District Court for Civil Matters for the
Federal District in Mexico City.

On Aug. 4, 2005, Satmex filed a petition, pursuant to Section 304
of the Bankruptcy Code to commence a case ancillary to the
Concurso Proceeding and a motion for injunctive relief seeking,
among other things, to enjoin actions against Satmex or its assets
(Bankr. S.D.N.Y. Case No. 05-16103).  (Satmex Bankruptcy News,
Issue No. 3; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


SCOTTISH RE: Fitch Downgrades Issuer Default Rating to BB
---------------------------------------------------------
Fitch Ratings downgraded Scottish Re Group Ltd.'s (NYSE:SCT)
ratings:

  Scottish Re Group Ltd.:

    -- Issuer default rating to ' BB' from 'BBB-'

  Operating subsidiaries:

    -- Insurer financial strength to 'BBB' from 'BBB+'

All ratings remain on Rating Watch Negative.

The ratings action follows an update of SCT's liquidity and
collateral position, which now appears tighter than Fitch had
previously anticipated.

Fitch does not believe that SCT has sufficient liquidity, without
concessions from its bank group, to fund the repayment of the $115
million in convertible notes in December 2006.

Since Fitch's most recent rating action on Aug. 1, 2006, SCT's
primary operating subsidiary, Scottish Annuity & Life Insurance
(Cayman) Ltd., has drawn down $265 million in funds under the
Stingray Investor Trust liquidity facility both to confirm the
availability of this source and for use in unwinding existing
funding agreements with rating triggers.  SALIC is also pursuing
other liquidity sources, including surplus relief transactions.
The liquidity and collateral position at SALIC appears solid
through March 31, 2007.

A key issue now is the considerable uncertainty surrounding
SALIC's ability to dividend funds to SCT or access credit
available under its bank facilities (to which SCT is not a party).
While SALIC is attempting to resolve the issue with the bank
syndicate, SCT is pursuing its own avenues to raise capital and is
engaged in finding a buyer for the company.

While Fitch believes the actuarial appraisal will indicate
significant value in the underlying business, the timing of a
potential sale as well as any other the other actions being
pursued by the company is uncertain.  As such the ratings could be
lowered further and remain on Rating Watch Negative.

These ratings remain on Rating Watch Negative:

  Scottish Annuity & Life Insurance Company (Cayman) Limited:

    -- IFS downgraded to 'BBB' from 'BBB+'

  Scottish Re (U.S.) Inc.:

    -- IFS downgraded to 'BBB' from 'BBB+'

  Scottish Re Limited:

    -- IFS downgraded to 'BBB' from 'BBB+'

  Scottish Re Group Limited:

    -- IDR downgraded to 'BB' from 'BBB-'

    -- 4.5% US$115 million senior convertible notes downgraded
       to 'BB-' from 'BB+

    -- 5.875% US$142 million hybrid capital units downgraded
       to 'B+' from 'BB'

    -- 7.25% US$125 million non-cumulative perpetual preferred
       stock downgraded to 'B+' from 'BB'


SERACARE LIFE: Inks Letter of Intent for $25-Mil. Convertible Loan
------------------------------------------------------------------
SeraCare Life Sciences, Inc., entered into a letter of intent and
term sheet with a syndicate of investors consisting of funds
managed by:

   * Cohanzick Management, LLC;
   * Robeco Investment Management;
   * Fairfield Greenwich Group;
   * Foxhill Capital Partners LLC;
   * Gruber & McBain Capital Management;
   * Seven Bridges Management, L.P.; and
   * Triage Capital Management LP

The LOI contemplates that the Investor Group would fund a secured
loan to the Company in the aggregate principal amount of up to
$25 million.  The Letter of Intent will not be effective unless
approved by the U.S. Bankruptcy Court for the Southern District of
New York.  

The Letter of Intent provides for, among other matters:

   -- the Convertible Debt would be convertible into the Debtor's
      common stock at the option of the Investor Group at an
      initial conversion price of $5.50 per share;

   -- the Convertible Debt would bear interest at an annual rate
      of 9%, payable monthly in cash;

   -- the Convertible Debt would have a 60-month term;

   -- the Convertible Debt would be secured by a perfected senior
      lien on all of the Debtor's assets other than the Debtor's
      West Bridgewater, Massachusetts facility;

   -- the Debtor would pay a facility fee of $200,000
      concurrently with the first issuance of Convertible Debt;

   -- the Convertible Debt would be used to repay the Company's
      existing bank debt, and then would be available for general
      working capital purposes;

   -- the Investor Group would be entitled to designate one person
      for election to the Debtor's Board of Directors;

   -- the closing of the Convertible Debt financing is subject to
      a number of conditions, including completion of due
      diligence to the satisfaction of the Investor Group,
      completion of definitive transaction documents and
      bankruptcy court approval;

   -- the Debtor would be subject to certain resale registration
      obligations under certain circumstances;

   -- the Debtor will pay the reasonable legal fees and expenses
      of the Investors, subject to certain caps and exceptions;
      and

   -- the Debtors has agreed to pay a $1.25 million breakup fee to
      the Investors in the event that the Company accepts a
      superior proposal to that contemplated by the Letter of
      Intent.  The breakup fee will be payable by the Company only
      out of the proceeds of such superior proposal or sale (and
      only in the event that the closing contemplated by such
      proposal or sale occurs).

A full-text copy of the Letter of Intent is available for free at
http://ResearchArchives.com/t/s?1039

Based in Oceanside, California, SeraCare Life Sciences, Inc. --
http://www.seracare.com/-- develops and manufactures biological   
based materials and services for diagnostic tests, commercial
bioproduction of therapeutic drugs, and medical research.  The
Company filed for chapter 11 protection on March 22, 2006
(Bankr. S.D. Calif. Case No. 06-00510).  The Official Committee of
Unsecured Creditors selected Henry C. Kevane, Esq., and Maxim B.
Litvak, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub
LLP, as its counsel.  When the Debtor filed for protection from
its creditors, it listed $119.2 million in assets and
$33.5 million in debts.


SILICON GRAPHICS: Wants Court Nod on Revised KPMG Hourly Rates
--------------------------------------------------------------
Silicon Graphics, Inc., and its debtor-affiliates seek authority
from the U.S. Bankruptcy Court for the Southern District of New
York to supplement and clarify its application to employ KPMG LLP,
solely with respect to the rates under which the firm will provide
accounting and audit services.

Barry Weinert, Esq., vice president and general counsel of
Silicon Graphics, Inc., relates that the Debtors and KPMG executed
a revised engagement letter to accurately reflect the firm's
customary hourly rates.

No other changes were made, Mr. Weinert tells Judge Lifland.

The revised rates reflect a nonmaterial increase from the
previously disclosed rates and the Debtors will continue to
receive a 15% discount, Mr. Weinert further explains.

The revised rates are:

       Professional                             Hourly Rate
       ------------                             -----------
       Partners/Directors                       $660 to $780
       Directors/Senior Managers/Managers       $495 to $750
       Senior/Staff Accountants                 $250 to $470
       Paraprofessionals                        $100 to $195

Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance  
computing.  SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data.  The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990).  Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602.  (Silicon Graphics Bankruptcy News,
Issue No. 15; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


SILICON GRAPHICS: Taps Paul Hastings as Special IP Counsel
----------------------------------------------------------
Barry Weinert, Esq., vice president and general counsel of
Silicon Graphics, Inc., recounts that the Debtors have employed
Morgan, Lewis & Bockius LLP as their special intellectual property
counsel.  Due to a conflict of interest, however, Morgan Lewis
cannot represent the Debtors with respect to certain matters.

The Debtors seek the U.S. Bankruptcy Court for the Southern
District of New York's permission to employ Paul, Hastings,
Janofsky & Walker LLP, as their special intellectual property
counsel, nunc pro tunc to August 1, 2006.

Mr. Weinert notes that the roles of Morgan Lewis and Paul
Hastings will be circumscribed to the greatest extent possible to
prevent unnecessary duplication of services.

Ronald S. Lemieux, a partner of Paul Hastings, has represented one
or more of the Debtors on a wide variety of patent litigation
matters over the last 15 years, Mr. Weinert tells the Court.
The Debtors anticipate that LG Electronics, Inc., may commence a
patent infringement action against them regarding eight patents.
Mr. Lemieux and his team are familiar with some of the asserted
patents, Mr. Weinert explains.

According to Mr. Weinert, Paul Hastings is well qualified to
represent the Debtors because of (i) the firm's extensive
expertise, experience and knowledge in the field of intellectual
property, and (ii) Mr. Lemieux's familiarity with the Debtors,
their business, and some of the asserted patents.

As IP Counsel, Paul Hastings will:

    (a) evaluate the impact of certain patents on the Debtors'
        business and reorganization plan;

    (b) defend the Debtors in the event that LGE commences any
        action or litigation in connection with its claims;

    (c) advise and counsel the Debtors on issues relating to
        certain patents, including litigation, negotiation,
        interpretation, and resolution of any disputes related to
        the patents; and

    (d) perform any other necessary legal services in furtherance
        of the firm's role as special counsel for the Debtors.

Paul Hastings' professionals will be paid based on their customary
hourly rates:

       Partners                                 $510 to $750
       Counsel                                  $495 to $730
       Associates                               $260 to $560
       Paraprofessionals and Staff               $70 to $285

The firm's attorneys expected to be most active in the Debtors'
Chapter 11 cases and their current hourly rates include:

       Ronald S. Lemieux                                $685
       Terry D. Garnett                                 $575
       Vincent Yip                                      $575
       Michael Edelman                                  $550
       Peter Weid                                       $510
       Jay Chiu                                         $490
       Vid Bhakar                                       $485
       Todd Snyder                                      $395
       Hua Chen                                         $395
       Daniel Prince                                    $350

The Debtors will reimburse the firm's reasonable, out-of-pocket
expenses.

Mr. Lemieux assures the Court that Paul Hastings does not
represent or hold any interest adverse to the Debtors or their
estates.  Other than Ableco Finance LLC and General Electric
Capital Corporation, Paul Hastings does not and will not seek to
represent any entity or individual adverse to the Debtors in their
Chapter 11 proceedings, Mr. Lemieux tells Judge Lifland.

The firm's representation of Ableco and GE has been disclosed to
the Debtors.  The firm has asked the Debtors and the adverse
parties for their confirmed consent to the representation and
their consent to waive any actual or potential conflict-of-
interest arising from it, Mr. Lemieux relates.  In addition, Paul
Hastings has established special procedures to segregate and
insulate the firm's attorneys involved in representing the
Debtors and the documents, files and information relating to the
Debtors, from disclosure to any adverse party.

Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance  
computing.  SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data.  The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990).  Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602.  (Silicon Graphics Bankruptcy News,
Issue No. 15; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


SOLUTIA INC: Engages Dundas & Wilson as Corporate Counsel
---------------------------------------------------------
Pursuant to the Court-approved procedures for hiring ordinary
course professionals, Solutia Inc. and its debtor-affiliates
inform the U.S. Bankruptcy Court for the Southern District of New
York that they are employing Dundas & Wilson LLP, based in
Aldwych, London, as counsel for corporate matters.  Dundas &
Wilson will be paid up to $10,000 per month.

The Debtors also seek to employ William Mullen, based in
Washington D.C., for up to $25,000 per month.  Williams Mullen
represents and counsels the Debtors with respect to antidumping
and customs issues.

                       About Solutia Inc.

Based in St. Louis, Mo., Solutia, Inc. -- http://www.solutia.com/
-- with its subsidiaries, make and sell a variety of high-
performance chemical-based materials used in a broad range of
consumer and industrial applications.  The Company filed for
chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case
No. 03-17949).  When the Debtors filed for protection from their
creditors, they listed $2,854,000,000 in assets and $3,223,000,000
in debts.  Solutia is represented by Richard M. Cieri, Esq., at
Kirkland & Ellis.  Daniel H. Golden, Esq., Ira S. Dizengoff, Esq.,
and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP
represent the Official Committee of Unsecured Creditors, and
Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital
provides the Creditors' Committee with financial advice.  (Solutia
Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)


SOLUTIA INC: Official Panel Hires Saul Ewing as Conflicts Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Solutia
Inc. and its debtor-affiliates' chapter 11 cases, obtained
authority from the U.S. Bankruptcy Court for the Southern District
of New York to retain Saul Ewing LLP as its conflicts counsel,
nunc pro tunc to June 13, 2006.

Ira S. Dizengoff, Esq., a partner at Akin Gump Strauss Hauer &
Feld LLP, explained that his firm currently represents certain
creditors and other parties-in-interest in matters unrelated to
the Debtors' Chapter 11 cases.  The Creditors Committee needed to
retain a special conflicts counsel to represent its interests
vis-a-vis the Akin Gump-represented parties or to otherwise
investigate or commence any appropriate causes of actions against
them.

Akin Gump disclosed that it was retained as counsel of the
creditors committee of Calpine Corp.  The Debtors are currently
involved in arbitration proceedings to resolve Calpine's claims
against their estates.  

The Creditors Committee has engaged Saul Ewing to advise and
represent it with respect to matters involving Calpine as well as
any other matters related to the Debtors' Chapter 11 cases in
which Akin Gump has a conflict.

To the extent that Akin Gump is conflicted from providing these
services, Saul Ewing is expected to:

   a) advise the Creditors Committee with respect to its rights,
      duties and powers in the Debtors' Chapter 11 cases;

   b) assist and advise the Committee in its consultations with
      the Debtors relative to the administration of the Chapter     
      11 cases;

   c) assist the Committee in analyzing the claims of the
      Debtors' creditors and the Debtors' capital structure and
      in negotiating with holders of claims and equity
      interests;

   d) assist the Committee in its investigation of the acts,
      conduct, assets, liabilities and financial condition
      of the Debtors and of their business operations;

   e) assist the Committee in its analysis of, and negotiations
      with, the Debtors or any third party concerning, among
      other things, the assumption or rejection of certain non-
      residential real property leases and executory contracts,
      asset dispositions, financing of other transactions and
      the terms of one or more plans of reorganization for the
      Debtors and accompanying disclosure statements and related
      plan documents;

   f) assist and advise the Committee as to its communications
      to creditors regarding significant matters in the Debtors'
      Chapter 11 cases;

   g) represent the Committee at all hearings and other
      proceedings;

   h) review and analyze applications, orders, statements of
      operations and schedules filed with the Court and advise
      the Committee as to their propriety;

   i) assist the Committee in preparing pleadings and
      applications as may be necessary in furtherance of its
      interests and objectives;

   j) prepare, on the Committee's behalf, any pleadings,
      including without limitation, motions, memoranda,
      complaints, adversary complaints, objections or comments;
      and

   k) perform other legal services as may be required or are
      otherwise deemed to be in the interests of the Committee
      in accordance with its powers and duties as set forth in
      the Bankruptcy Code, Bankruptcy Rules or other applicable
      law.

Edward J. Haye, a member of Saul Ewing, discloses that the Firm's
professionals bill:

          Name                 Designation      Hourly Rate
          -----                -----------      -----------
          Edward J. Haye      Special Counsel      $375
          Bruce V. Miller     Special Counsel       435
          J. Kate Stickles       Partner            375
          Jeremy W. Ryan        Associate           315
          Monica A. Molitor     Paralegal           155

Other professionals who will also represent the Creditors
Committee will be paid at these hourly rates:

                 Professionals       Hourly Rate
                 -------------       -----------
                 Partners            $335 - $650
                 Special Counsel     $250 - $440
                 Associates          $175 - $320
                 Paraprofessionals   $95 - $215

Mr. Haye attests that the firm does not represent or hold any
interest adverse to the Creditors Committee or the Debtors and
their estates, creditors or equity security holders.  He says that
the firm is a "disinterested person" as that term is defined in
Sections 101(14) and 1107(b) of the Bankruptcy Code.

                       About Solutia Inc.

Based in St. Louis, Mo., Solutia, Inc. -- http://www.solutia.com/
-- with its subsidiaries, make and sell a variety of high-
performance chemical-based materials used in a broad range of
consumer and industrial applications.  The Company filed for
chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No.
03-17949).  When the Debtors filed for protection from their
creditors, they listed $2,854,000,000 in assets and $3,223,000,000
in debts.  Solutia is represented by Richard M. Cieri, Esq., at
Kirkland & Ellis.  Daniel H. Golden, Esq., Ira S. Dizengoff, Esq.,
and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP
represent the Official Committee of Unsecured Creditors, and
Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital
provides the Creditors' Committee with financial advice.  (Solutia
Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service, Inc.
http://bankrupt.com/newsstand/or 215/945-7000)


STAR GAS: Federal Judge Dismisses Securities Class Action
---------------------------------------------------------
The U.S. District Court for the District of Connecticut granted
the motions of Star Gas Partners, L.P., its general partner,
former officers, directors and underwriters to dismiss with
prejudice a consolidated class action complaint alleging
violations of the Securities Act of 1933 and the Securities
Exchange Act of 1934.

Several securities class actions had been filed within days of a
drop in the trading price of Star Gas common units after the
Company's Oct. 18, 2004 announcement that it was suspending the
quarterly distributions to its common unitholders and might have
to seek to restructure its debts under the protection of the
bankruptcy courts due to record heating oil prices and customer
attrition.  The Class Action Complaint alleged that numerous
statements by the Company about its business made in SEC filings,
press releases and conference calls were fraudulent.  In
dismissing the Complaint, District Judge Janet Bond Arterton
specifically held that the plaintiffs failed to allege that Star
Gas made any false or misleading statements.

According to Jonathan J. Lerner, a partner in Skadden, Arps,
Slate, Meagher & Flom LLP, lead counsel for Star Gas, "The Court
went through a painstaking analysis of all the securities law
claims and decisively rejected all of them.  This decision appears
to be bullet-proof on appeal."

Joseph P. Cavanaugh, Chief Executive Officer of the Company
stated: "We are gratified by the Court's decision.  We hope this
will bring an end to the distraction from litigation."

                        About Star Gas

Headquartered in Stamford, Connecticut, Star Gas Partners, L.P. --
http://www.star-gas.com/-- is a home energy distributor and
services provider specializing in heating oil.

                          *     *     *

As reported in the Troubled Company Reporter on July 18, 2006,
Fitch upgraded Star Gas Partners, L.P.'s Issuer Default Rating to
'B-' from 'CCC'; and its outstanding 10.25% senior unsecured notes
due 2013, co-issued with its special purpose financing subsidiary
Star Gas Finance Company, to 'B/RR3' from 'CCC/RR4'.

The notes are removed from Rating Watch Positive where they were
placed on March 31, 2006, following a favorable assessment by
Fitch of Star Gas' then proposed plan of recapitalization.  The
notes have a Recovery Rating of 'RR3', indicating good recovery,
and the Rating Outlook is Stable.  Approximately $172 million of
notes remain outstanding.


STEEL DYNAMICS: S&P Puts BB Corp. Credit Rating on Positive Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
its 'BB' corporate credit rating, on Fort Wayne, Indiana-based
Steel Dynamics Inc. on CreditWatch with positive implications.

"The action reflects the company's continued strong financial
performance, conservative balance sheet, and industry conditions
that should remain healthy long enough to allow the company to
fund its meaningful capital expenditure program in 2007," said
Standard & Poor's credit analyst Marie Shmaruk.

Steel Dynamics has benefited from the strong pricing environment
of the past two years.

"Although the steel industry is cyclical, volatile and is
beginning to feel pricing pressure from high levels of imports, we
do not expect that any deterioration in steel industry conditions
would be severe enough to affect SDI's growth initiatives or to
significantly weaken its balance sheet," Ms. Shmaruk said.

"Over the long term, we remain concerned about potential margin
compression for domestic producers.  Continued growth of global
steel capacity, coupled with high procurement costs driven by
global production, could have a material impact on margins.
However, Steel Dynamics' business mix and cost position should
enable it to manage future downturns effectively."


TAPESTRY PHARMA: Incurs $4.1 Million Net Loss in Second Quarter
---------------------------------------------------------------
Tapestry Pharmaceuticals, Inc., reported a $4.1 million net loss
on zero revenue for the three months ended June 28, 2006, compared
to a $4.4 million net loss on zero revenue in 2005, the company
disclosed its second quarter financial results on Form 10-Q to the
Securities and Exchange Commission.

                         Private Placement

On April 5, 2006, the Company sold an aggregate of 12,750,000
shares of common stock and warrants to purchase up to 12,750,000
shares of common stock for a total of $25.5 million (excluding any
proceeds that might be received upon exercise of the warrants) or
approximately $23.8 million, net of the placement agent fees and
other expenses, pursuant to a Purchase Agreement dated Feb. 2,
2006.  The purchase price was $2.00 per share of common stock, and
each warrant to purchase common stock has an exercise price equal
to $2.40 per share.  The Company may call up to 20% of the
outstanding warrants during any three month period if certain
conditions are satisfied, including the trading price of its
common stock exceeding $4.80 for 20 consecutive trading days.  Up
to half of the warrants may be exercised on a cashless or net
exercise basis.  There can be no assurance, however, that the
Company will receive funds from the exercise of warrants.

In addition, the Company issued warrants to purchase 50,000 shares
of common stock to a financial advisor and issued warrants to
purchase 100,000 shares of common stock to an outside consultant
as a finders' fee on substantially similar terms as the warrants
issued under the Purchase Agreement.  The Company agreed to
include the shares underlying the warrants in any registration
statement filed by us on behalf of the Purchasers.

In connection with the Private Placement, the Company entered into
a registration rights agreement wherein the Company agreed to make
the requisite SEC filings to achieve and substantially maintain
the effectiveness of a registration statement covering shares sold
in the Private Placement.  If the Company failed to file a
required registration statement or to achieve or substantially
maintain the effectiveness of a required registration statement
during the related period, the Company will be obligated to pay
liquidated damages in an amount up to 1.5% of the $25.5 million
purchase price paid by investors for each 30 day period or pro
rata for any portion thereof in excess of its allotted time.  On
May 4, 2006, the Company filed a registration statement on Form S-
3 to register the resale of the shares sold in the Private
Placement as well as the shares underlying the warrants issued in
the Private Placement and the warrants issued to financial
advisors and consultants in conjunction with the Private
Placement.  The Securities and Exchange Commission declared this
registration statement effective on May 18, 2006.  The Company is
now required to maintain the effectiveness of the registration
statement, subject to certain exceptions, through the period the
warrants are outstanding and up to an additional two years for a
maximum period of seven years through April 6, 2013.

A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?1035

                       Going Concern Doubt

As reported in the Troubled Company Reporter on March 21, 2006,
Grant Thornton LLP raised going concern doubts about Tapestry
Pharmaceuticals' ability to continue as a going concern after
auditing its financial statements for the year ending December 28,
2005.

The Company had no revenue and incurred a $17,538,000 net loss
during the year ended December 28, 2005, and, as of that date,
reported an accumulated deficit of $107,262,000.  Cash and short-
term investments on hand totaled $14,086,000 at Dec. 28, 2005.

                About Tapestry Pharmaceuticals

Tapestry Pharmaceuticals, Inc., is a pharmaceutical company
focused on the development of proprietary therapies for the
treatment of cancer.  The Company is also actively engaged in
evaluating new therapeutic agents and/or related technologies.  
Its evaluation of new products and technologies may involve the
examination of individual molecules, classes of compounds, or
platform technologies.  Acquisitions of new products or
technologies may involve the purchase or license of such products
or technologies, or the acquisition of, or merger with, other
companies.


TENET HEALTHCARE: USC Wants Tenet to Give Up Hospital Ownership
---------------------------------------------------------------
University of Southern California filed a lawsuit to order a Tenet
Healthcare Corporation subsidiary to give up ownership and control
of USC University Hospital.

                        Covenant Default

According to the lawsuit, filed in Los Angeles Superior Court by
Marshall B. Grossman of Alschuler, Grossman, Stein & Kahan LLP,
"The Lease and Operating Agreement (between USC and Tenet) provide
that USC may terminate those agreements if there is an "Event of
Default," as that term is defined in those agreements."  USC
claims in its lawsuit that the Operating Agreement and Lease have
been terminated as a result of default on the part of Tenet.  The
lawsuit seeks a judicial declaration terminating the agreements
with Tenet, an order forcing Tenet to vacate the premises and an
order mandating that Tenet deliver a quitclaim deed to USC to
clear title to the premises.

The lawsuit alleges that the "substantial and expensive disputes
and litigation" Tenet and certain of its subsidiaries have been
involved in since late 2002 with the federal government, states
and private parties "have materially reduced Tenet's unrestricted
cash," and as a result Tenet has been forced to substantially
alter and vary its funding and capital investment for the
hospital.

The lawsuit also emphasizes that Tenet "has brought upon itself
both economic and reputational damage" and "has lost $5 billion
over the past three fiscal years."  Tenet CEO and President,
Trevor Fetter, has admitted that the governmental and regulatory
action has been "devastating."

The lawsuit goes on to allege that Tenet's "ability to maintain
patient admissions and recruit physicians to practice at the
hospital and retain the physicians at the hospital has been
materially diminished as a result of [Tenet's] poor reputation."

According to USC, the lawsuit was filed to protect the interests
of USC and the health and well-being of the greater Los Angeles
community which is served by the hospital complex.

                     About Tenet Healthcare

Based in Dallas, Texas Tenet Healthcare Corporation (NYSE: THC)
-- http://www.tenethealth.com/-- through its subsidiaries, owns  
and operates acute care hospitals and related health care
services.  Tenet's hospitals aim to provide the best possible care
to every patient who comes through their doors, with a clear focus
on quality and service.

                          *     *     *

As reported in the Troubled Company Reporter on July 4, 2006, In
light of the announcement of the settlement of investigations
being conducted by the Department of Justice and a number of State
Attorneys into Medicare outlier payments, Fitch Ratings affirmed
'B-' issuer default rating and 'B-/RR4' senior unsecured debt
recovery rating for Tenet Healthcare Corp., with a Negative Rating
Outlook.


TOWER PARK: Balance Sheet Upside-Down by $5.36 Mil. at June 30
--------------------------------------------------------------
Tower Park Marina Investors, LP, incurred an $83,000 net loss
on $1,150,000 of net revenues during the second quarter ending
June 30, 2006, the Company disclosed on a Form 10-QSB filing
delivered to the Securities and Exchange Commission on
Aug. 9, 2006.

As of June 30, 2006, the Company's balance showed $3,357,000 in
total assets and $5,361,000 in total partners' deficit.

                       Going Concern Doubt

As reported in the Troubled Company Reporter on July 5, 2006,
Vasquez & Company LLP in Los Angeles, California, expressed
substantial doubt about Tower Park Marina's ability to continue as
a going concern after it audited the Company's financial statement
for the fiscal year ended Dec. 31, 2005.  The auditing firm
pointed to the Company's failure to generate a satisfactory level
of cash flow.  Cash flow projections do not indicate significant
improvement in the near term.

A full-text copy of the regulatory filing is available for free at
http://ResearchArchives.com/t/s?103a

Tower Park Marina is located in the Sacramento - San Joaquin Delta
near Sacramento, California.  The partnership has been aggregated
into four reportable business segments: Slip rental; RV parking;
Retail sales; and Fuel services.  Slip rental comprise the wet
boat slip rentals and dry boat storage operations at the marina.
RV parking represents both long term and transient recreational
vehicle parking at the campgrounds adjacent to the marina.  Retail
sales segment consists of the operations of the retail boat supply
and sundries store at the marina.  The Fuel service segment
reports the operations of the fuel dock at the marina.


TRANSMONTAIGNE INC: Prices $200 Mil. 9-1/8% Senior Notes Offering
-----------------------------------------------------------------
TransMontaigne Inc. disclosed the pricing terms for its offer
to purchase and consent solicitation for all of its $200 million
9-1/8% Senior Subordinated Notes due 2010, made pursuant to its
Offer to Purchase and Consent Solicitation Statement dated
July 24, 2006.

The total consideration for the Notes was determined as of
2:00 p.m., New York City time, on Aug. 18, 2006, by reference to a
fixed spread of 50 basis points above the yield to maturity of the
3-1/2% U.S. Treasury Note due May 31, 2007.  The reference yield
for the Notes was 5.625%.  The total consideration, determined
according to the pricing formula, is $1,068.46 per $1,000
principal amount, plus accrued interest. This amount includes a
consent fee of $30 per $1,000 principal amount, payable to those
holders who validly tendered their Notes prior to 5:00 p.m., New
York time, on Aug. 4, 2006.  For Notes tendered after the Consent
Date and prior to the Expiration Date, the tender offer
consideration will be $1,038.46 per $1,000 principal amount, plus
accrued interest to the settlement date of the tender offer.

At the Consent Date, the Company received the noteholder consents
required to enable the elimination of substantially all
restrictive covenants and certain events of default provisions
in the Indenture governing the Notes.  In addition, the Company
previously extended the tender offer for the Notes, which is
currently set to expire at 8:00 a.m., New York City time, on
Sept. 1, 2006, unless further extended or terminated.

If the tender offer is again extended for a period longer than
three business days from the current Expiration Date, the Company
will establish a new price determination date, which will be the
tenth business day prior to the new Expiration Date, and the
pricing terms and consideration may change.

                     About TransMontaigne

TransMontaigne Inc. (NYSE:TMG) is a refined petroleum products
marketing and distribution company, based in Denver, Colorado with
operations in the United States, primarily in the Gulf Coast,
Florida, East Coast and Midwest regions.  The Company's principal
activities consist of (i) terminal, pipeline, tug and barge
operations, (ii) marketing and distribution, (iii) supply chain
management services and (iv) managing the activities of
TransMontaigne Partners L.P.  The Company's customers include
refiners, wholesalers, distributors, marketers, and industrial
andcommercial end-users of refined petroleum products.

                         *     *     *

As reported in the Troubled Company Reporter on May 1, 2006,
Standard & Poor's Ratings Services held its 'B+' corporate
credit rating on petroleum storage and distribution company
TransMontaigne Inc. on CreditWatch with developing implications,
following the announcement that Morgan Stanley Capital Group
Inc. has made a competing offer to acquire TransMontaigne for
$10.50 per share.

As reported in the Troubled Company Reporter on March 30, 2006,
Standard & Poor's Ratings Services revised the CreditWatch
implications for its 'B+' corporate credit rating on petroleum
storage and distribution company TransMontaigne Inc. to developing
from positive.


TURNER-DUNN HOMES: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Lead Debtor: Turner-Dunn Homes, Inc.
             1780 East Fontana Drive
             Casa Grande, Arizona 85222

Bankruptcy Case No.: 06-00961

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Turner-Dunn Construction, Inc.             06-00962
      Turner-Dunn Acquisitions, L.L.C.           06-00963
      M & L Phase I, L.L.C.                      06-00964
      M & L Land II, L.L.C.                      06-00965

Type of Business: The Debtors develop housing units.

Chapter 11 Petition Date: August 14, 2006

Court: District of Arizona (Tucson)

Debtor's Counsel: Alan A. Meda, Esq.
                  Stinson Morrison Hecker LLP
                  1850 North Centra Avenue, #2100
                  Phoenix, AZ 85004
                  Tel: 602-279-1600
                  Fax: 602-240-6925

                           Estimated Assets   Estimated Debts
                           ----------------   ---------------
Turner-Dunn Homes, Inc.    $0 to $50,000      $0 to $50,000

Turner-Dunn Construction,  $10 Million to     $1 Million to
Inc.                       $50 Million        $10 Million

Turner-Dunn Acquisitions,  $1 Million to      $1 Million to
L.L.C.                     $10 Million        $10 Million

M & L Phase I, L.L.C.      $10 Million to     $10 Million to
                           $50 Million        $50 Million

M & L Land II, L.L.C.      $10 Million to     $10 Million to
                           $50 Million        $50 Million

The Debtors did not file a list of their 20 Largest Unsecured
Creditors.


US AIRWAYS: Pilot Leaders Picket in Philadelphia Int'l Airport
--------------------------------------------------------------
US Airways Group Inc. pilot leaders, represented by the Air Line
Pilots Association, International, picketed at the Philadelphia
International Airport to demonstrate their resolve in attaining a
fair contract for the US Airways pilots that recognizes and
rewards them for the $6.8 billion in concessions that they
committed to US Airways to ensure the airline would become the
successful company it is.

"US Airways recently posted a second quarter 2006 profit of
$305 million, and expects to be profitable for the rest of the
year and into the future," said Captain Jack Stephan, US Airways
Master Executive Council Chairman.  "This is a far cry from the
dark days of our 2002 and 2004 bankruptcies, when the US Airways
pilots saved the airline as it was teetering on the edge of
liquidation.  Our pay and benefits were slashed, our work rules
were decimated, and our pensions were terminated.

"Now, after merging with America West Airlines, US Airways is
profitable, but the US Airways pilots are still making bankruptcy-
era wages. US Airways Chairman, President and CEO Doug Parker,
however, just cashed in $9 million in stock, approximately 20% of
his holdings -- all while stating that he is seeking a cost-
neutral pilot contract.  We will not stand by as US Airways
management lines their pockets with the profits we provided them.  
It is nothing less than bankruptcy profiteering."

Before the merger was completed, the US Airways and America West
pilots agreed upon a Transition Agreement to provide a process for
the US Airways and America West pilots to negotiate a single
agreement with management.  While US Airways and America West
pilots have been negotiating this single contract with US Airways
management for the past nine months, little progress has been made
in economic and operational areas due to management's insistence
on a cost-neutral contract.

"When US Airways management asked the pilots to sacrifice our pay
and work rules, and we agreed, we became the airline's largest and
most important investor.  The US Airways pilots' governing body,
the MEC, will only approve an agreement to send to the pilot group
that properly recognizes our contributions and our unprecedented
investment in the airline.  We continue to negotiate with
management and await a proposal that meets our needs as
investors," said Captain Stephan.

Founded in 1931, ALPA represents 61,000 pilots at 40 airlines in
the U.S. and Canada. ALPA represents approximately 2,490 active US
Airways pilots. Visit the ALPA website at http://www.alpa.organd  
the US Airways pilots' website at http://www.usairwayspilots.org.

                         About US Airways

Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of US Airways, Inc.,
Allegheny Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines,
Inc., MidAtlantic Airways, Inc., US Airways Leasing and Sales,
Inc., Material Services Company, Inc., and Airways Assurance
Limited, LLC.

Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts.  In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts.

The Debtors' chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005.  The Debtors completed their
merger with America West on the same date. (US Airways Bankruptcy
News, Issue No. 122; Bankruptcy Creditors' Service, Inc.,
215/945-7000)

                        *     *     *

As reported in the Troubled Company Reporter on June 14, 2006,
Standard & Poor's Ratings Services affirmed its 'B-' corporate
credit and other ratings on US Airways Group Inc., and revised the
outlook to stable from negative.


VALENCE TECH: Posts $5.7 Million Net Loss in Quarter Ended June 30
------------------------------------------------------------------
Valence Technology Inc. reported revenues of $3.2 million for the
three-month period ending June 30, 2006, compared to $3.4 million
in the first quarter of fiscal year 2006.

Revenue for the quarter was negatively impacted by production
delays of the N-Charge small format battery, which was affected by
the Underwriters Laboratories' re-certification process.  This
created a backlog of N-Charge batteries that the Company expects
to fulfill during the second quarter of fiscal 2007.

The company reported a net loss available to common stockholders
of $5.7 million in the first quarter of fiscal year 2007, compared
to a net loss available to common stockholders of $8.2 million in
the first quarter of fiscal year 2006, and a net loss available to
common stockholders of $9.6 million in the fourth quarter of
fiscal year 2006.

At June 30, 2006, the company's balance sheet showed total assets
of $15,027,000 and total liabilities of $78,437,000, resulting in
a stockholders' deficit of $72,020,000.

"We are pleased with the results of our cost reduction programs
over the last year and we are seeing the benefits of a lot of hard
work by our team which is evidenced by our reaching a key goal of
positive gross margin in the first quarter of fiscal 2007.  The
recent demand for our large-format Saphion(R) batteries further
demonstrates that we are well positioned to gain market share in
our core markets," said Dr. James R. Akridge, President and Chief
Executive Officer of Valence Technology Inc.  "We will remain
focused on growing revenue, reducing costs and improving gross
margins, while improving shareholder value."

During the quarter, Valence also:

     -- achieved positive Gross Margin;

     -- reduced operating expenses by 22% compared to first
        quarter fiscal last year;

     -- reduced operating cash flow by 38% compared to first
        quarter fiscal last year;

     -- increased large-format battery systems sales to 74% of the
        sales mix, compared to 37% for the prior year; and

     -- shipped six new models of the U-Charge(R) Power System
        large-format lithium-ion batteries as well as a new
        Battery Management System and battery discharge indicator.

                             Outlook

Valence forecasts revenue for the second quarter of fiscal year
2007 to be in the range of $5 million to $6 million.  The expected
increase in revenue for the second quarter is a result of an
increase in sales of large format systems as well as filling small
format N-Charge system orders that were scheduled to be shipped in
the first quarter but which were postponed until the second
quarter of fiscal year 2007 after receiving UL re-certification.

                             Stock Sale

On Aug. 3, 2006, Valence sold $2 million of its common stock to
West Coast Venture Capital, Inc., an affiliate of Carl E. Berg,
chairman of Valence's Board of Directors.  The proceeds will be
used to fund corporate operating needs and working capital.  

Under the terms of the purchase, the Company issued 1,298,702
shares of common stock, par value $0.001 per share, in a private
placement transaction exempt from the registration requirements of
the Securities Act of 1933, as amended, pursuant to Section 4(2)
thereof.  

West Coast purchased these shares at $1.54 per share.  The
purchase price per share equaled the closing bid price of the
Company's common stock as of Aug. 3, 2006.  Under Rule 144 of the
Securities Act, these shares are restricted from being traded by
West Coast for a period of one year from the date of issuance,
unless registered, and thereafter may be traded only in compliance
with the volume restrictions imposed by this rule and other
applicable restrictions.

                       Going Concern Doubt

As reported in the Troubled Company Reporter on July 5, 2006,
Deloitte & Touche LLP expressed substantial doubt about Valence's
ability to continue as a going concern after auditing the
Company's financial statements for the fiscal year ending March 3,
2006.

Deloitte & Touche pointed to the Company's recurring losses from
operations, negative cash flows from operations and net
stockholders' capital deficiency.

                         About Valence

Headquartered in Austin, Texas, Valence Technology, Inc., --
http://www.valence.com/-- develops and markets battery systems  
using Saphion(R) technology, the industry's first commercially
available, safe, large-format Lithium-ion rechargeable battery
technology.  Valence Technology holds an extensive, worldwide
portfolio of issued and pending patents relating to its Saphion
technology and lithium-ion rechargeable batteries.  The company
has facilities in Texas, Las Vegas, Nevada, and Suzhou and
Shanghai, China.  Valence is traded on the Nasdaq Capital Market
under the symbol VLNC.


VARIG S.A.: Eyeing $2 Billion Loan to Fund Aircraft Purchase
------------------------------------------------------------
Volo do Brasil plans to apply for a $2,000,000,000 loan from Banco
Nacional de Desenvolvimento Economico e Social, Brazil's
government-run national development bank, to finance its purchase
of up to 50 E190 jets from Empresa Brasileira de Aeronautica S.A.,
Reuters reports.

According to Reuters, Embraer Chief Executive Officer Mauricio
Botelho told analysts at an earnings conference call on
Aug. 14, 2006, that his company and Volo are very close to a deal.

An E190 jet can accommodate up to 100 passengers.

Reuters relates that BNDES President Demian Fiocca said the bank
is willing to offer special credit lines to help local airline
operators purchase Embraer planes.  Mr. Fiocca said BNDES could
provide up to 85% of the cost of each plane.

VARIG intends to use the Embraer planes for domestic flights and
Boeing or Airbus planes for international operations, Reuters
reports.

Bloomberg News, citing O Estado de S. Paulo newspaper, says VARIG
is also in talks with Boeing and Airbus to acquire 245-seater
commercial aircraft.

VARIG is currently flying 12 planes and a portion of its original
routes.  VARIG plans to expand its fleet to 45 planes by the end
of the year and up to 75 aircraft by 2008, according to The
Associated Press.

Volo acquired VARIG's operating assets at an auction in July 2006.  
Volo has pledged to infuse more than $500,000,000 to allow the
airline to pay debts and return to profitability.  The sale is
still subject to regulatory approval by the National Civil
Aviation Authority in Brazil.

                          About VARIG

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia.  VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage.  The Debtors may be the first case under the new law,
which took effect on June 9, 2005.  Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization.  Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 30; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000)


VARIG S.A.: Resuming Venezuelan Service Tomorrow
------------------------------------------------
VARIG S.A. will resume flights to Venezuela beginning
Aug. 25, 2006, according to Bloomberg News citing El Universal, a
Venezuelan newspaper.

As widely reported, VARIG cancelled several domestic and
international flights as its bankruptcy proceedings continued to
drag and it lacked funding to pay fuel and airport fees.

VARIG will operate six weekly flights between Caracas, Venezuela,
and Manaus and Sao Paolo, Brazil, El Universal said, according to
Bloomberg.  VARIG will also offer discounted fares for round-trip
flights between Caracas and Sao Paolo.

                          About VARIG

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia.  VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage.  The Debtors may be the first case under the new law,
which took effect on June 9, 2005.  Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization.  Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 30; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000)


VESCOR DEVELOPMENT: Case Summary & 11 Largest Unsecured Creditors
-----------------------------------------------------------------
Lead Debtor: Vescor Development 3 LLC
             861 Coronado Center Drive, Suite 222
             Henderson, Nevada 89052

Bankruptcy Case No.: 06-12094

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      BDL 2, LLC                                 06-12095
      EDL 5, LLC                                 06-12096

Type of Business: The Debtor is a real estate developer.

Chapter 11 Petition Date: August 16, 2006

Court: District of Nevada (Las Vegas)

Judge: Linda B. Riegle

Debtor's Counsel: Laurel E. Davis, Esq.
                  Lionel Sawyer & Collins
                  300 South 4th Street #1700
                  Las Vegas, NV 89101
                  Tel: (702) 383-8866
                  Fax: (702) 383-8845

                           Total Assets      Total Debts
                           ------------      -----------
Vescor Development 3 LLC   $109,570,385      $63,290,195
BDL 2, LLC                  $50,122,335      $17,185,331
EDL 5, LLC                  $67,989,200      $38,254,430

A. Vescor Development 3 LLC's 4 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Apex Vegas Vista, LLC         Intercompany Note       $2,855,992
861 Coronado Center Drive,    Payable
Suite 222
Henderson, NV 89052

IDL 9, LLC                    Intercompany Note       $2,523,293
861 Coronado Center Drive,    Payable
Suite 222
Henderson, NV 89052

BDL 2, LLC                    Intercomoany Note       $2,198,277
861 Coronado Center Drive,    Payable
Suite 222
Henderson, NV 89052

EDL 5, LLC                    Intercomoany Note       $1,911,694
861 Coronado Center Drive,    Payable
Suite 222
Henderson, NV 89052


B. BDL 2, LLC's 5 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
450 H, LLC                    Lease Payments             $21,920

Don & Janet Mayhue            Lease Payments             $16,667
Co-Trustees

Gordon Olson                  Lease Payments             $16,250

Kim Moore                     Lease Payments              $3,533

Clark County Assessor         Lease Payments              $2,969


C. EDL 5, LLC's 2 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
VesCor Development LLC        Note Payable               $26,018

Clark County Assessor         Real Property Taxes         $4,814


VISKASE COS: Strained Liquidity Prompts S&P to Junk Ratings
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior secured debt ratings on Viskase Cos. Inc. to 'CCC'
from 'B-'.

As of June 30, 2006, Darien, Illinois-based Viskase had total debt
outstanding of about $113 million.

All ratings remain on CreditWatch with negative implications.  
The ratings were initially placed on CreditWatch on May 5, 2005,
following Viskase's announcement that its Board of Directors
engaged Harris Williams Advisors to evaluate strategic
alternatives, including debt and/or equity financings, the
sale of the company, and a rights offering.

"Today's actions reflect ongoing concerns regarding the company's
strained liquidity given its upcoming interest payments and the
deterioration in Viskase's highly leveraged financial profile,"
said Standard & Poor's credit analyst Robyn Shapiro.

At Aug. 10, 2006, the company had a small cash balance and
availability of $7.5 million under its $20 million revolving
credit facility.  Standard & Poor's expects liquidity to remain
strained, given negative cash flow from operations and sizable
interest payments of about $10 million in December 2006 and May
2007 on its 11.5% senior secured notes.

Additionally, the company's 8% subordinated notes become cash-pay
in 2007.

Standard & Poor's expects to resolve the CreditWatch as soon as
more information becomes available related to the company's
strategic direction, or if liquidity deteriorates further to the
extent that would result in lower ratings.

The restructuring process of the company's finishing operations
hurt Viskase's recent operating performance.  The company is
relocating finishing operations from a facility in Indiana to a
facility in Mexico in order to achieve operating cost reductions.
Because of the machine movements related to the restructuring,
sales volumes have been lower than expected.

In addition, the total cost of the restructuring includes
approximately $16 million of cash expenditures as well as $10
million in capital expenditures (as of June 30, 2006, the company
had made capital expenditures of about $9 million).  The company
expects to complete the restructuring by the end of 2006.

Viskase remains highly leveraged.  As of June 30, 2006, total
adjusted debt to EBITDA was about 7x and the key ratio of funds
from operations to total adjusted debt was about 3%.  Standard &
Poor's adjusts debt to include capitalized operating leases and
unfunded pension and postretirement benefits obligations,
resulting in a significant increase to the debt load.

Viskase's unfunded position related to pension and other
postretirement employee benefit obligations is substantial, at
$66 million as of Dec. 31, 2005.

With annual sales greater than $200 million, Viskase is a global
producer of nonedible cellulosic, fibrous, and plastic casings
used to prepare and package processed meat products.


VISTEON CORP: Ford's Production Cuts Cue S&P's Negative Watch
-------------------------------------------------------------
Standard & Poor's Ratings Services placed Visteon Corp.'s rating
on CreditWatch with negative implications.  The CreditWatch
placements reflect Standard & Poor's decision to review the
company's rating in light of Ford Motor Co.'s announcement that
it will sharply lower its North American production in the second
half of 2006, with the largest cuts coming in the fourth quarter.

Ford's production of light trucks in the fourth quarter will be
down 155,000 units, or 28%, versus fourth-quarter 2005 production.
These cuts will adversely affect on several fronts those suppliers
with substantial Ford exposure.

Fourth-quarter cash flow and liquidity will likely be reduced from
previous expectations, perhaps significantly.  The magnitude of
the reduction in liquidity will depend on other calls on cash in
the quarter, availability under existing bank facilities, and any
mitigating actions, although such offsets within the quarter may
be limited.

The long-term effect on supplier ratings will depend on Ford's
ability to stem its market share losses, which will drive 2007
production levels.  Ford's very dramatic fourth-quarter production
cuts may turn out to be an alternative to lesser cuts extending
over several quarters into 2007.  But the negative effect on cash
flow and liquidity in the fourth quarter will increase challenges
for certain suppliers in 2007, regardless of whether more stable
production levels occur in 2007.

Standard & Poor's will assess the effect of Ford's announcement in
light of the other business challenges facing Visteon Corp.  

Standard & Poor's expects to conclude its reviews within the next
two months.

Rating Placed on Creditwatch With Negative Implication:

                              To                From
                              --                ----
       Visteon Corp.:  B+/Watch Neg./B-2   B+/Negative/B-2


WORLDCOM INC: District Court Bars Alan Grayson's Lift Stay Motion
-----------------------------------------------------------------
Alan Grayson sought to pursue a qui tam action, on behalf of the
state of California, filed under seal on Feb. 8, 2002, in the
Superior Court of California, County of Sacramento, to recover
from WorldCom Inc. and its debtor-affiliates "breakage", which he
asserts had escheated to the State.  Breakage refers to the
unused portion of prepaid calling cards.

Subsequently, Mr. Grayson filed an appeal to the United States
District Court for the Southern District of New York of the
Honorable Arthur Gonzalez's order denying his request for a
declaration of the inapplicability of the automatic stay to the
California Action.

                       Findings on "Breakage"

The Bankruptcy Court found that the terms of the Debtors' tariff
and Prepaid Service Agreement, which governed the calling cards,
prohibited the refund for activated or partially used calling
cards and that those terms provide that consumers pay a fee in
advance for the right to use the Debtors' telecommunication
services.  Judge Gonzalez held that the only property held by the
Debtors is the remaining amount of fees paid upfront which had
become non-refundable after activation upon the first use of the
calling card.

According to the District Court, Judge Gonzalez's conclusion is a
legal conclusion based on the facts presented and is thus subject
to a clearly erroneous standard of review.  District Court Judge
Robert Patterson, Jr., maintains that Mr. Grayson was not able to
show that the Bankruptcy Court erred in its conclusion.

The conclusions of the Bankruptcy Court are consistent with the
opinions of the California Superior Court, holding that the
California Unclaimed Property Law does not apply to breakage,
Judge Patterson notes.  In fact, the California Superior Court
has twice dismissed the California Action for failure to state a
claim.

Accordingly, Judge Patterson finds that the Bankruptcy Court's
conclusion that the State has no interest in the breakage claimed
in the California Action is not erroneous.

                 Failure to File a Proof of Claim

Mr. Grayson argued that:

   -- his claim is encompassed by the proof of claim filed by
      California for escheat liability;

   -- he should be permitted to amend California's proof of
      claim; or

   -- he should be permitted to file a late proof of claim due to
      unique and extraordinary circumstances beyond his control.

Judge Patterson holds that the Bankruptcy Court made a finding of
fact when it found that the State's proof of claim did not
encompass breakage from prepaid calling cards.

Moreover, amendment is not permitted for entirely new claims, the
District Court notes.  Since the State chose not to intervene in
Mr. Grayson's Action to amend its proof of claim to include
breakage or file a separate proof of claim with respect to
breakage, Mr. Grayson has not shown that the Bankruptcy Court
abused its discretion in declining to approve Mr. Grayson's claim
as an amendment to the State's proof of claim.

Mr. Grayson's application also came more than a year after the
Bar Date and just before the Effective Date of the Debtors' Plan
of Reorganization.  Thus, the Bankruptcy Court's decision was not
an abuse of discretion, Judge Patterson contends.

Mr. Grayson further argued that because the California Action was
filed under seal, he would have violated that seal by submitting
a proof of claim in the Bankruptcy Court at an earlier date.  The
District Court opines that the Bankruptcy Code and the Federal
Rules of Bankruptcy Procedure provide a process for protecting
confidentiality of documents filed with the Bankruptcy Court and
Mr. Grayson could have sought leave to file his proof of claim in
the Bankruptcy Court under seal.

                        The Automatic Stay

Mr. Grayson asserted that his action is a proceeding by a
governmental unit to enforce the police and regulatory power.

Judge Gonzalez found that Mr. Grayson failed to support the
proposition that one acting on behalf of a state can assert the
police power exception of Section 362(b)(4) of the Bankruptcy
Code.  Mr. Grayson has not shown that Judge Gonzalez erred in
finding that a qui tam action in which the State has decided not
to intervene does not fall within the police power exception of
Section 362(b)(4).

                  California's Sovereign Immunity

The Bankruptcy Court correctly held that "the Eleventh
Amendment's grant of sovereign immunity is not applicable in [Mr.
Grayson's qui tam case on California's behalf]", according to
Judge Patterson.  As Judge Gonzalez has noted, "the Eleventh
Amendment seems only to prohibit making a state a defendant in an
action."  The District Court notes that Mr. Grayson's complaint
does not involve a lawsuit filed by another party against a
state.  Instead, Mr. Grayson, on behalf of the state of
California, seeks leave from the Bankruptcy Court to pursue a
lawsuit against the Debtors.

Furthermore, the State submitted to the jurisdiction of the
Bankruptcy Court by filing its own proofs of claim against the
Debtors before the Bankruptcy Court, Judge Patterson points out.

                         Plan Injunction

Judge Patterson opines that the California Action clearly falls
within the injunction provision of the Plan.

The District Court agrees with the Bankruptcy Court's findings
that:

   -- even if Mr. Grayson's claim had merit, the funds he seeks
      are currently held by the Debtors and any relief he seeks
      will have to come out of the estate and would require
      further review by the Bankruptcy Court; and

   -- as the Plan has been approved, allowing Mr. Grayson's
      Complaint to proceed in California would defeat the goal of
      an efficient and expeditious claims resolution process.

Bankruptcy courts are often called upon to apply state laws in
resolving claims against a debtor's estate.  Judge Patterson
finds that Mr. Grayson failed to explain how the Bankruptcy Court
abused its discretion in determining that efficiency
considerations weighed in favor of staying the California Action.

Moreover, Mr. Grayson offered no argument or claim to show how
the Bankruptcy Court abused its discretion in determining that
his claims did not primarily involved third parties, Judge
Patterson asserts.

Also, the District Court notes that Mr. Grayson does not dispute
the Bankruptcy Court's findings that:

   -- the California Action was not "near ready for trial"; and

   -- the "claims adjudication process has been established and
      there is no support to disrupt the established process."

For all these reasons, Judge Patterson upholds the Bankruptcy
Court's decision denying Mr. Grayson's request to lift the
automatic stay.

                         About WorldCom

WorldCom, Inc., a Clinton, MS-based global communications company,
filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y.
Case No. 02-13532).  On March 31, 2002, WorldCom listed
$103,803,000,000 in assets and $45,897,000,000 in debts.  The
Bankruptcy Court confirmed WorldCom's Plan on Oct. 31, 2003, and
on Apr. 20, 2004, the Company formally emerged from U.S. Chapter
11 protection as MCI, Inc.  On Jan. 6, 2006, MCI merged with
Verizon Communications, Inc.  MCI is now known as Verizon
Business, a unit of Verizon Communications.  (WorldCom Bankruptcy
News, Issue No. 123; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


* Kronish Lieb to Merge with Cooley Godward
-------------------------------------------
Cooley Godward LLP, a national leader in representing technology
and life sciences companies and litigating high-stakes commercial
and intellectual property disputes, will merge with Kronish Lieb
Weiner & Hellman LLP, a premier 110-lawyer New York firm with
highly ranked bankruptcy, tax and complex commercial and white
collar litigation practices.  The name of the combined 550-
attorney firm will be Cooley Godward Kronish LLP.

The merger will create a firm with a coast-to-coast, high-caliber
litigation practice, extensive corporate and transactional
capabilities and a significant presence in New York.  The combined
250-lawyer litigation practice will include nationally known trial
lawyers and more than 10 former federal prosecutors and will offer
clients deep experience and expertise representing major
corporations in high-profile complex commercial, white collar
crime, securities fraud and intellectual property cases.  Cooley's
preeminent national business practice in venture capital, emerging
and public companies, corporate finance, life sciences, technology
transactions and mergers and acquisitions will gain a New York
base enhanced by Kronish's reputation and long-standing ties in
the financial center of the world.  In addition, Kronish's leading
bankruptcy and tax practices, combined with Cooley's, will enable
the merged firms to provide even deeper expertise in these
business-critical practice areas.

"Cooley lawyers are advising clients in New York courtrooms and
boardrooms every week," said Stephen Neal, Cooley Godward's
chairman and chief executive officer.  "This merger immediately
establishes a formidable presence in New York with a partner that
is a perfect complement for us.  Kronish has successfully competed
with New York's largest and best firms for 50 years and it has a
stellar reputation. We plan to grow aggressively in New York to
better serve our clients' needs."

A native New York firm led by Managing Partner Alan Levine,
Kronish represents leaders in the financial services,
pharmaceutical, energy and technology sectors.  Recent headline
cases include the defense of St. Paul Fire and Marine Insurance
Co. and Travelers Indemnity Company in a $1 billion Enron-related
litigation and the representation of Metromedia Fiber Network Inc.
in a $5 billion Chapter 11 case.  Its white collar group boasts
five former Assistant United States Attorneys and is currently
representing the defendant in the largest Foreign Corrupt
Practices Act prosecution to date.  The firm is ranked #1 in The
Deal's Bankruptcy Insider league tables in 2006 for Top Unsecured
Creditor Law Firms, and the chair of its tax group was named one
of the five leading tax controversy lawyers in New York.  
Kronish's real estate practice spans both national and
international matters with a particular focus on the Caribbean and
Latin America.

Mr. Levine commented, "We have been courted for years by many
firms. In Cooley's case, the fit was so good in every way --
strategically, culturally, right down to the individual level.  We
will be able to provide for our clients the advantages of a
national firm with tremendous depth and expertise across
industries and practice areas.  Cooley is an established national
leader with technology and life sciences companies, and its
clients will benefit greatly by having a presence in the world's
financial capital.  Our New York litigation practice will augment
Cooley's strengths, and together we will be well positioned to
continue to grow in New York and beyond.  All of us at Kronish are
very excited to join our new colleagues."

Cooley's move to New York is a natural next step in the firm's
continued expansion and enhancement of its practices over recent
years.  Cooley has ranked #2 nationally in representing venture-
backed companies in financings since 2002 (Source: VentureSource),
ranked #1 in life sciences issuer-side IPOs from 2000 to 2005
(Source: IPO Vital Signs) and ranked 14th nationally in M&A
transactions in 2005.  On the litigation side, recent highlights
include the firm's successful defense of Siebel Systems (now part
of Oracle Corp.) in the first-ever contested Regulation FD
enforcement action and one of the most closely watched securities
cases of 2005, its significant victory for PacifiCare in the
multidistrict coordinated class action asserting broad challenges
to the managed care industry including a successful argument by
Cooley in the United States Supreme Court, and its successful
representation of USG Corporation and its related entities in
multi-billion dollar asbestos claims before federal district and
bankruptcy courts.

The merger will bring together two firms that place a premium on
culture.  Cooley recently ranked in The Vault Guide to the Top 100
Law Firms as the #5 law firm in the country as a "best firm to
work for" in terms of quality of life.  Kronish is also committed
to maintaining a personal and collegial culture, and, over the
years, Kronish lawyers have played significant leadership roles in
a host of civic, educational and charitable institutions.

Both firms have also placed a premium on pro bono services in the
communities in which they operate and beyond.  Cooley recently
spearheaded a comprehensive effort to provide legal services to
the victims of Hurricane Katrina and is representing the survivors
of human rights abuses in Somalia seeking redress from former
leaders of that country's government.  In addition, Santillan, et
al. v. Gonzales, et al., a major impact pro bono matter
successfully handled by Cooley, was selected by The National Law
Journal as one of the country's top pro bono cases of 2005.

Kronish Lieb has received Pro Bono Awards from The Legal Aid
Society of New York in 2004 and 2005 for providing pro bono legal
services to underprivileged New Yorkers.  In a case widely
followed by the media, Kronish represents two defendants accused
of murder in the Palladium shootings, and a team of Kronish
lawyers represented the Legal Services Corporation in the Supreme
Court in a case involving the constitutional limits of Congress'
ability to define the scope of services provided by federally
subsidized programs.

The merger, effective Oct. 1, 2006, will create a firm with full-
service offices in the major commercial and government centers of
New York, San Francisco, and Washington, D.C., as well as in the
country's most significant technology markets: Palo Alto and San
Diego, Calif., Reston, Va. and Broomfield, Colo.  Kronish's Alan
Levine will become a member of the firm's newly created executive
committee and will lead the New York office.  Stephen Neal will
remain chairman and chief executive officer.

                      About Cooley Godward

Cooley Godward LLP -- http://www.cooley.com/-- is a prominent  
national law firm and a recognized leader in representing
technology companies and litigating complex, high-profile cases.  
The firm represents public and private companies around the world,
with a longstanding leadership position in the private equity,
technology and life sciences sectors.  Its clients include both
high-growth and mature companies across all major industries, as
well as the venture capital firms and financial institutions that
support them.  Cooley's focus is to provide the highest quality
legal services directed at enabling our clients to achieve their
strategic business objectives.

                       About Kronish Lieb

Founded in 1958, Kronish Lieb Weiner & Hellman LLP --
http://www.kronishlieb.com/-- is a premier full-service law firm  
based in Manhattan.  Servicing clients ranging from Fortune 500
companies to start-ups, the firm is organized according to seven
practice areas -- Litigation, Bankruptcy & Restructuring,
Corporate, Real Estate, Tax, Personal Representation and
Structured Real Estate Investments.  Kronish Lieb is known for its
commitment to client service, as reflected in the recent Chambers
USA Guide, which said: "Clients describe a troupe of dedicated and
first-class attorneys renowned for 'thoroughly marvelous work'."


* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
-------------------------------------------------------------
Recent chapter 11 cases filed with assets and liabilities below
$1,000,000:

In re Arthur G. Howell
   Bankr. N.D. Ala. Case No. 06-81587
      Chapter 11 Petition filed August 15, 2006
         See http://bankrupt.com/misc/alnb06-81587.pdf

In re Campbell Tiu Campbell, Inc.
   Bankr. N.D. Ill. Case No. 06-09872
      Chapter 11 Petition filed August 15, 2006
         See http://bankrupt.com/misc/ilnb06-09872.pdf

In re D&M Walls, Inc.
   Bankr. E.D. Mich. Case No. 06-51015
      Chapter 11 Petition filed August 15, 2006
         See http://bankrupt.com/misc/mieb06-51015.pdf

In re Superior Vision Inc.
   Bankr. S.D.N.Y. Case No. 06-11903
      Chapter 11 Petition filed August 15, 2006
         See http://bankrupt.com/misc/nysb06-11903.pdf

In re 1st United Tel-Com
   Bankr. N.D. Tex. Case No. 06-42607
      Chapter 11 Petition filed August 16, 2006
         See http://bankrupt.com/misc/txnb06-42607.pdf

In re 256 Gourmet Food Corp.
   Bankr. S.D.N.Y. Case No. 06-11919
      Chapter 11 Petition filed August 16, 2006
         See http://bankrupt.com/misc/nysb06-11919.pdf

In re Bret P. Brown
   Bankr. N.D. Ill. Case No. 06-09998
      Chapter 11 Petition filed August 16, 2006
         See http://bankrupt.com/misc/ilnb06-09998.pdf

In re Brick Pit, Inc.
   Bankr. N.D. Ga. Case No. 06-69836
      Chapter 11 Petition filed August 16, 2006
         See http://bankrupt.com/misc/ganb06-69836.pdf

In re Jacob & Henein, Inc.
   Bankr. C.D. Calif. Case No. 06-11371
      Chapter 11 Petition filed August 16, 2006
         See http://bankrupt.com/misc/cacb06-11371.pdf

In re GW Restaurant Group, Inc.
   Bankr. E.D. Mich. Case No. 06-51119
      Chapter 11 Petition filed August 16, 2006
         See http://bankrupt.com/misc/mieb06-51119.pdf

In re Patrick Y. Liu
   Bankr. N.D. Ill. Case No. 06-09948
      Chapter 11 Petition filed August 16, 2006
         See http://bankrupt.com/misc/ilnb06-09948.pdf

In re Pretty Punch, L.L.C.
   Bankr. D. Arizona Case No. 06-02554
      Chapter 11 Petition filed August 16, 2006
         See http://bankrupt.com/misc/azb06-02554.pdf

In re Stephens Holdings, Inc.
   Bankr. N.D. Ind. Case No. 06-11309
      Chapter 11 Petition filed August 16, 2006
         See http://bankrupt.com/misc/innb06-11309.pdf

In re Suburban Fence, Inc.
   Bankr. N.D. Ill. Case No. 06-09965
      Chapter 11 Petition filed August 16, 2006
         See http://bankrupt.com/misc/ilnb06-09965.pdf

In re Alamo Wheelchair Transportation Services, Inc.
   Bankr. S.D.N.Y. Case No. 06-35826
      Chapter 11 Petition filed August 17, 2006
         See http://bankrupt.com/misc/nysb06-35826.pdf

In re Allied Entertainment Systems, Inc.
   Bankr. N.D. Tex. Case No. 06-33399
      Chapter 11 Petition filed August 17, 2006
         See http://bankrupt.com/misc/txnb06-33399.pdf

In re D&F Services, Inc.
   Bankr. D. N.J. Case No. 06-17678
      Chapter 11 Petition filed August 17, 2006
         See http://bankrupt.com/misc/njb06-17678.pdf

In re Four Season Maintenance, Inc.
   Bankr. W.D. Mich. Case No. 06-03928
      Chapter 11 Petition filed August 17, 2006
         See http://bankrupt.com/misc/miwb06-03928.pdf

In re Lopez Industries, Inc.
   Bankr. W.D. Mich. Case No. 06-03931
      Chapter 11 Petition filed August 17, 2006
         See http://bankrupt.com/misc/miwb06-03931.pdf

In re SkinWithin Services, Ltd.
   Bankr. N.D. Tex. Case No. 06-33398
      Chapter 11 Petition filed August 17, 2006
         See http://bankrupt.com/misc/txnb06-33398.pdf

In re Egoiste, Inc.
   Bankr. S.D.N.Y. Case No. 06-11938
      Chapter 11 Petition filed August 18, 2006
         See http://bankrupt.com/misc/nysb06-11938.pdf

In re Rimmele-Angelino Investments, Inc.
   Bankr. N.D. Ill. Case No. 06-10105
      Chapter 11 Petition filed August 18, 2006
         See http://bankrupt.com/misc/ilnb06-10105.pdf

In re RWC Trucking, Inc.
   Bankr. N.D. Ill. Case No. 06-10140
      Chapter 11 Petition filed August 18, 2006
         See http://bankrupt.com/misc/ilnb06-10140.pdf

In re Building Blocks to Learning Coalition, Inc.
   Bankr. W.D.N.Y. Case No. 06-02449
      Chapter 11 Petition filed August 21, 2006
         See http://bankrupt.com/misc/nywb06-02449.pdf

In re Forest Lakes Property Owners Assoc. Inc.
   Bankr. D. Colo. Case No. 06-15547
      Chapter 11 Petition filed August 21, 2006
         See http://bankrupt.com/misc/cob06-15547.pdf

In re Wet Olive, Inc.
    Bankr. S.D. Fla. Case No. 06-13972
      Chapter 11 Petition filed August 21, 2006
         See http://bankrupt.com/misc/flsb06-13972.pdf

In re Bridges 21st Century Inc.
   Bankr. M.D. Fla. Case No. 06-04351
      Chapter 11 Petition filed August 22, 2006
         See http://bankrupt.com/misc/flmb06-04351.pdf

In re CDW Warehouse, Inc.
   Bankr. D. N.J. Case No. 06-17810
      Chapter 11 Petition filed August 22, 2006
         See http://bankrupt.com/misc/njb06-17810.pdf

In re Wells Pipeline Co., Inc.
   Bankr. E.D. Ark. Case No. 06-13618
      Chapter 11 Petition filed August 22, 2006
         See http://bankrupt.com/misc/areb06-13618.pdf

                             *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.  
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com/

On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts.  The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911.  For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                             *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA.  Marie Therese V. Profetana, Robert Max Victor M. Quiblat II,
Shimero R. Jainga, Joel Anthony G. Lopez, Emi Rose S.R. Parcon,
Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q.
Salta, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin
and Peter A. Chapman, Editors.

Copyright 2006.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $725 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.

                    *** End of Transmission ***